ECG — 2025-01-10
News from ECG
In the first 11 months of 2024, the volume of new vehicles exported from China has superseded the full year exports of 2023. In the January to November period a total of 5.34 million new vehicles have been exported from China, as per data from the China Association of Automobile Manufacturers (CAAM), marking an annual increase of 22.7%.
But the volume that was exported in the month of November itself was almost 10% down compared to the preceding month. In November there were 490,000 new vehicles exported from China, down from 542,000 in October.
Meanwhile, the volume of internal combustion engine vehicles (ICE), that is vehicles powered by gasoline or diesel, continue to account for the majority of vehicles exported. In the January to November period ICE vehicles accounted for 78.6% of vehicles exported, some 4.2 million vehicles.
The top export destinations for vehicles manufactured in China are led by Russia with 957,000 units in the first 10 months of the year, followed by Mexico with 386,000 units and the UAE with 261,000 units. In fourth position is Belgium, a gateway to the EU, with 247,000 units imported. While direct exports to the UK have reached 167,000 units. Please note destination data always lags by a month, and the CAAM data only includes the top 10 destinations by volume.
The question is, are the volumes increasing to the same destinations or are there simply more destinations to which vehicles are exported to from China to account for the 22.7% surge in volumes. Well, direct vehicle exports to Russia are up 24.1% y/y in the January to October timeframe, while exports to Mexico are up 15.4% y/y, exports to the UAE are up 115.6%. But what about Belgium and the UK?
Direct exports of new vehicles from China to Belgium are up 30.7% y/y in Jan-Oct 2024 compared to the same period in 2023, but direct exports from China to the UK have dipped by 4.2%.
And with Turkey now serving as another gateway into the EU, it is no surprise that volumes arriving there have risen to 114,000 units in the first 10 months of 2024, a 67% year on year increase.
Now , with special thanks to Destatis, the German Federal Bureau of Statistics, and Eurostat data, we can track the volume of passenger cars* imported into the EU as a whole from China. What this shows us is the proportion of new vehicles coming in via Belgium, and therefore how important a gateway Belgium is for the EU.
Imports of passenger cars from China to the EU reached 616,831 units in the January to October period, of which 40% entered via Belgium.
Given the scenario of tariffs and policies, and the tit-for-tat trade war between the EU and China, it is interesting to note that imports of PCs from China to the EU totalled 93,139 units in October alone, an all time high, and a 35% jump compared to September. How these units now reach the market will depend on the latest round of discussions to agree a base retail sales price on battery electric cars produced in China and sold in the EU.
However, under the current trade scenario ICE cars and PHEVs are free of economic sanctions and can respond directly to market forces of demand and supply, and those units coming in via Turkey reflect a completely different product mix than the predominantly EV volumes coming in to Belgium.
*Passenger Cars is defined under HS Code 8703 family of vehicles, with all low speed vehicles (LSVs) removed, giving us a solid overview of the trends and volumes of cars coming in from China.
ECG Members may access the full report here.