ECG — 2023-08-02
News from ECG
Chinese finished vehicle exports have reached 2.14 million units in the January to June period, marking an annual increase of 76% compared to the 1.21 million units exported in the first half of 2022, as per data released by the China Association of Automobile Manufacturers (CAAM).
Exports of passenger vehicles (PV) account for the vast majority of vehicles exported from China, with volume hitting 1.78 million units, up 88.15% y/y. While commercial vehicles (CVs) account for 360,000 units exported in the H1 period, up 16.81% y/y.
Of the total exports New Energy Vehicles (NEVs) which are defined as pure electric vehicles (EVs), plug in hybrids (PHEVs) and fuel cell vehicles (FCEVs) accounted for 534,000 units up 164% in the first half of the year. Meanwhile regular internal combustion engine (ICE) vehicles accounted for exports of 1.6 million units, up 58% compared to the 1.01 million units exported in the first half of 2022.
On a month-on-month basis, the volume of exports is however declining. In May this year, vehicle exports hit 389,000 units were exported, while in June exports have dropped 1.79% to 382,000 units.
Main Takeaway
While the numbers look strong on an annual basis it is the implications of the trends developing within the data that is crucial to understand the outlook. Forecasters have been quick to use regulations to determine the outlook of the markets in Europe by 2030, when regulations stipulate that we must drive electric vehicles (EVs). However, the actual penetration of such vehicles is slowing, and for Chinese brands, their entry into the developed markets of Western Europe has not yet seen the volumes anticipated barring brands such as MG which has had a strong heritage to build on.
If we look at Germany, for instance, latest data from the KBA shows that Chinese brands accounted for sales of just 15,493 units in the first half of this year, giving them a market share of 1.1% of the new car market there. However brands such as Tesla do use their production in China for export to Europe, and therefore the volume of made-in-China models is higher.
If we look at the UK, Chinese brand penetration has hit just over 5% of the passenger vehicle market as per data from the SMMT, mainly on the back of the MG brand. In the commercial vehicle segment, the Maxus brand has now gained a 1.1% market share of the CV segment.
But if we look further afield to Russia, the volume of Chinese brand penetration is strong. Chinese brands now control almost 40% of the new car market, as per data from the AEBRUS, with H1 sales over 163,055 units. But this market, like others such as Kazakhstan and Mexico, are the main strongholds for ICE vehicle sales. And the money is in EV exports.
The most recent push by Chinese brands is to develop an EV market for their models in the Middle East with a push in the last few months to develop sales in Israel, Jordan, UAE and Saudi Arabia. Brands such as BYD, Zeekr, and even the ‘dragon fly’ brand Qiantu Motors are forging partnerships with dealers there. The other growing market for Chinese EVs is Asia itself. Chinese brands have strengthened exports to Thailand and plans afoot to establish forays into India are being thwarted as the Indian government cites security concerns prompting BYD to pull out, Great Wall was also forced to shelve plans there. But here too MG is determined to build inroads.
And on a final note, those that work in the FVL sector are well aware of the discrepancy that often lies between volumes exported from a country and those that make it to the retail sales sector. Congested ports are often where vehicles sit waiting. Overall Russia is the largest volume importer of Chinese cars today, but with almost 300,000 units exported from China to Russia in the first 5 months of the year, only 163,055 units were reported in retail sales.
For a detailed look at the data behind the story please see the full report here.
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