Canalys: China's passenger car exports from domestic automotive brands are expected to reach 4.5 million units in 2024, a year-on-year increase of 29%.

Canalys predicts that in the second half of 2024, the export volume of Chinese automotive brands passenger cars is expected to reach 2.5 million units, with a total of 4.5 million units for the whole year, a year-on-year growth of 29%. Due to the impact of EU tariff policies and decreasing demand for new energy vehicles, the export growth rate of Chinese pure electric vehicle models will slow down to 9% (860,000 units), with the export share decreasing from 22.5% in 2023 to 19.0% in 2024. Meanwhile, the export share of plug-in hybrid electric vehicles (PHEV) and hybrid electric vehicles (HEV) will exceed 10% for the first time in three years, reaching 310,000 units and 240,000 units respectively. Latin America and Europe are the main regions driving the growth in exports of Chinese automotive brands plug-in hybrid electric vehicles and hybrid electric vehicles. Canalys senior analyst Liu Ceyuan stated, "Passenger car exports are expected to maintain strong growth in 2024, with a growth rate of 24% and a total export volume of 3.1 million units. The success of MG, Chery, and Great Wall Motor in overseas gasoline vehicle markets demonstrates the significant improvement of Chinese automotive brands in gasoline vehicle technology. Chery and Great Wall Motor seized the opportunity of international brands exiting the Russian market, expanding their market share rapidly. The gradual implementation of new global expansion strategies by manufacturers such as Dongfeng and GAC (02238) further promotes export growth in the Chinese market. In 2024, it is expected that the export volumes of these two brands will increase fourfold and twofold respectively, accounting for 10% of the export volume of Chinese automotive brands." In the first three quarters of 2024, the export volume of Chinese automotive brands passenger cars increased by 27% to 3.1 million units. Due to the EU imposing tariffs on Chinese vehicles, Europe is the only region where export volume decreased, with a 4% decline. With increasing export volumes in other regions, the EU dropped from being China's largest export market for automotive brands in 2023 to the fourth largest market in 2024. Liu Ceyuan continued, "Despite the decline in export volume and weak demand for new energy vehicles, the EU remains the largest export market for Chinese vehicles, accounting for 28.4% of the total export volume. The weakening demand for new energy vehicles in Europe and political uncertainties will slow down Chinese automotive manufacturers' investment processes in that region, but Europe remains a core market for Chinese manufacturers in their globalization process. Chinese automotive manufacturers are rapidly launching hybrid electric vehicle models to diversify their overseas product portfolio, to avoid tariffs and meet the local demand for economical vehicles, while expanding brand awareness in preparation for the resurgence of local demand for new energy vehicles. SAIC Motor Corporation, with its MG3 and MG ZS hybrid electric products, aims to challenge the position of Japanese brands in the European market." Liu Ceyuan added, "Although the total export volume of Chinese vehicles is growing rapidly, manufacturers still face uncertainties in their overseas expansion. Differences in channel system capabilities and product localization capabilities have led to significant differences in actual sales and inventory situations in overseas markets. And with current limitations on pure trade exports and manufacturers establishing overseas plants and seeking local industry chain integration, these capabilities are particularly important." Although Chinese vehicles have achieved global leadership in electrification and intelligence technology, their competitive advantage in ADAS and intelligent cockpit technology has not fully manifested in the European market. Against the backdrop of a long-term industrial development, Chinese manufacturers should rationally consider the concept of "overtaking in the curve of new energy vehicles" and carefully evaluate the possibility of directly replicating the successful path in the Chinese market to the global market. Despite the gradual decrease in market share of Japanese and Korean automakers in the Chinese market, their paths to globalization are still worth studying by Chinese manufacturers. Canalys Chief Analyst Liu Jiansen stated, "The disputes between the EU and China over tariffs on new energy vehicles have brought significant obstacles to the electrification process of the global automotive industry. Geopolitical tensions may hinder knowledge sharing and investment in joint research and development between manufacturers of the two regions. If the dispute escalates, the EU may weaken its competitiveness in the development of the new energy vehicle ecosystem, thereby losing its position in global automobile and green energy leadership. However, we remain optimistic that the Chinese market will remain open and provide opportunities for cooperation in new energy vehicle technology and supply chains for the global market. The potential of the markets in both regions will continue to attract close cooperation to find long-term solutions."