Affected by the shortage of chips, the growth rate of China's auto market has recently dropped. However, since the beginning of this year, China's auto export market has continued to strengthen.

Customs statistics show that from January to April 2021, China's auto exports reached 585,000 units, an increase of 83% year-on-year. The export value was US$8.882 billion, an increase of 105.7% year-on-year. The average price of a single vehicle was US$15,200, an increase of 12%.

Over the past few years, China's auto export volume has hovered around 1 million vehicles, and no substantial breakthrough has ever been achieved. Will auto exports this year usher in a turning point?

Chip shortage inhibits exports of joint venture brands

"Overseas markets are affected by the epidemic, and demand for vehicle production and consumption is in short supply. This has brought some opportunities for independent brands to go overseas. In addition, the misjudgment of European and American chip supply has caused serious imbalances in production and sales in overseas markets. At present, the domestic market Having gotten rid of the impact of the epidemic, compared with overseas car companies, domestic car companies are currently relatively less affected by chips, and they have met some vehicle needs in overseas markets."

The increase in automobile exports is mainly related to the overseas market performance of companies such as SAIC Motor, Great Wall, Geely, Chery, and Tesla. The early overseas business was mainly simple export trade, lacking deep cultivation and operation of overseas markets. With the implementation of the overseas layout of auto companies, some production capacity has also been released.

At present, Great Wall Motors has established factories in Russia and has relatively mature systems in Thailand and other places. After Geely Automobile acquired Proton, its production has entered a relatively formal state, and SAIC has also established factories in some overseas markets such as Southeast Asia. "The production capacity in Russia exceeded 3,000 units for the first time last month. This year, the production capacity will be greatly increased. The sales target in the Russian market is 42,000 units." Sales of 70,000 vehicles in overseas markets will double this year. Currently, the models sold in overseas markets are mainly Haval brand series and Great Wall Cannon (pickup).

In the past, most of China's export models were at the low-end level in terms of technology and performance. The added value of products was low, the export unit price was low, the profit was meagre or even losses, and the brand competitiveness was poor, which was also an Achilles heel of auto exports. Meng Xiangjun believes that the entire automobile export market is in a good situation this year, and the models that Chinese car companies go to overseas are no longer low-quality and low-priced products. "The prices of Haval F7 and Great Wall Guns in some overseas markets are even higher than those in China." Meng Xiangjun told reporters that with brand building, the scale of overseas markets is expected to further expand in the future.

In addition, although the export volume of leading independent car companies has increased, it is worth noting that the export volume of joint venture brands has declined. In recent years, foreign auto companies' production capacity in China has begun to feed back the global market, so they account for an increasing proportion of China's auto exports. Among them, SAIC-GM-Wuling is one of the first joint venture car companies to realize global production and supply in China. Ford has also closed its car production line in the United States, and the remaining Ford cars have been transferred to overseas plants mainly based on Changan Ford for production. However, data from the Passenger Association show that in April, the export volume of joint venture brand passenger vehicles fell by 17%. "The decrease in export volume is related to the shortage of chips. Take GM and Ford as examples. Their global supply of chips is already insufficient, and the supply of chips to Chinese car companies is also insufficient. They are not even enough to meet the Chinese market, so exports will inevitably be affected."

From the perspective of export markets, Asia still occupies a large market share. In the first quarter of this year, China exported 153,000 vehicles to Asia, a year-on-year increase of 56%; South America was 87,000 vehicles, a year-on-year increase of 86%; Europe was 83,000 vehicles, a year-on-year increase of 215%; Africa and North America both About 40,000 vehicles.

"The adjustment of tariffs in the ASEAN region will further promote exports. From the perspective of the medium-term development in the future, Indonesia will become an important export market for China and other auto companies." The Chairman of the Malaysian Automobile Industry Association Xu Zongwen had previously been interviewed by a reporter from China Business News. Said that due to the overcapacity of China's auto production, the relationship with neighboring countries has become increasingly close. If the quality of autos can be improved to a higher level, it is believed that there will be more room for cooperation in the future.If a factory is built in any ASEAN member country, as long as the localization reaches a certain proportion, it can be exported to any ASEAN country. Chinese independent brands are trying to reopen the ASEAN market in the form of heavy assets.

According to a report recently released by the Passenger Association, the core driving force for the growth of the automotive export market this year is still the growth space of passenger cars, especially in the Middle East and Africa and other countries where the export performance is relatively strong, while markets such as Europe and Mexico have recently been strong. The construction of bases in Southeast Asia, such as SAIC Group and Great Wall, has also achieved certain results. However, considering the international trade environment, logistics conditions, local parts supporting system, and challenging local leading brand capabilities, ASEAN and Australia are the best markets, and Eastern Europe and the Commonwealth of Independent States markets also have good opportunities.

Tesla exports account for more than 10%

The export volume of automobiles has increased significantly this year. From the perspective of the export structure, new energy vehicles have increased significantly. Therefore, although the export volume of joint venture vehicles has declined, the substantial increase in the export volume of new energy vehicles has made up for sales. According to data from the Passenger Association, taking the sales volume in April as an example, the export of passenger vehicles and CKD was 107,000, a year-on-year increase of 146%, of which new energy vehicles accounted for 16% of the total exports. In the overall sales volume, the export of self-owned brands reached 80,000 vehicles, a year-on-year increase of 169%, and the export of joint venture brands decreased by 17%.

According to data from the Travel Association, the export of new energy vehicles to the European market has grown rapidly. Among them, SAIC and Tesla performed relatively well. Tesla exported 14,000 units to China in April, SAIC exported 2,378 new energy vehicles for passenger cars, and 335 units of AIWAYS. In addition, exports of electric vehicles such as BYD and Guangzhou Automobile have performed well and are gaining momentum. In the future, with the layout of overseas business of new car manufacturers, the scale of domestic new energy vehicle exports is expected to further expand.

It is worth noting that Tesla's export volume has made a great contribution to China's auto exports. "At least 30,000 to 40,000 vehicles were exported in one quarter, and the scale reached more than 100,000 vehicles in one year, accounting for more than 10% of China's overall automobile exports."

From the perspective of different markets, India used to be one of China's major exporters of new energy vehicles, with low-speed electric vehicles as the main model, with a price of around US$500. However, this year, the epidemic in India has been severe, and automobile exports have been greatly affected. At present, a large number of new energy vehicles are exported to Europe, and new energy vehicles such as BYD and SAIC passenger cars are favored. "The price-performance ratio is high, and the competitiveness of China's new energy vehicles is relatively strong abroad." Cui Dongshu said that at this stage, China's auto exports can only rely on new energy vehicles, because the overall competitiveness of traditional vehicles is relatively poor. The export of new cars to Chinese brands is also a competitive advantage.

The reporter learned that the number of new energy vehicles exported from 2017 to 2019 is relatively large, but passenger vehicles are basically micro low speed electric vehicles. New energy exports will perform well in 2020, but the plug-in hybrid models are resold products of joint ventures. At present, the performance of new energy passenger vehicle exports has improved.

"In recent years, foreign auto companies have accelerated their investment, cooperation, and construction of factories in China, and China's new energy vehicle first-mover advantage has weakened. The golden window of'going out' is constantly shrinking, leaving it to China's new energy vehicle industry. The time is getting shorter and shorter.” Great Wall Motor President Wang Fengying said in an interview with a reporter from China Business News that China’s new energy automobile industry is facing the global potential of mid-to-high-end new energy brands and products that urgently need to be strengthened, and the supply chain system is not yet perfect. Some key technologies and resources depend on imports and many other issues.