Chinese Auto Exports: It's Time to Change the Strategy

This year, China's auto export volume is expected to exceed 10 million vehicles, and it may enter a faster track in the future. August 20, at the Global New Energy Vehicle Cooperation and Development Forum (GNEV2026), Chebai International Chief Expert Zhang Yongwei stated as such.

He reminded that the global development of Chinese autos is no longer just China's own matter, but has largely become a matter of global concern. Doing this well requires internal and external linkage. Relying on a single party alone, this task cannot be done well.

The window period will not be long; differentiation has already begun

Chinese brands are growing rapidly in various major overseas markets.

It is worth noting that China's auto exports hovered around the 1 million vehicle mark for about ten years, after which the curve rose steeply: 4.91 million vehicles in 2023, 7.098 million in 2025, with growth accelerating continuously.

Data from the China Association of Automobile Manufacturers and the General Administration of Customs shows that in the first half of this year, China exported 5.096 million complete vehicles, a year-on-year increase of 65.3%. Single-month exports in June reached 1.037 million, breaking the 1 million mark for the first time in history. New energy vehicle exports reached 2.355 million, with a growth rate of 120%, accounting for 46% of total exports.

Multiple forecasts predict that complete vehicle exports will reach 10 million in 2026, with about 5 million being new energy vehicles.

The changes in the European market are very convincing. In June this year, Chinese brands' single-month market share in Europe exceeded 11%, with pure electric share at 15% and plug-in hybrid share at 34%, setting a historic high.

In the ranking of registration growth in Europe for the first six months, BYD grew 145%, Chery grew 305%, and Leapmotor even reached 558%. Chery Jaecoo 7 topped the UK monthly sales list in March; BYD's order schedules in Germany, France, and Spain have been extended.

Belt and Road Initiative countries form the basic foundation of exports, with 3.381 million vehicles exported in the first half of the year, growing at 48.1%.

In the Southeast Asian market, Chinese brands dominate the electric vehicle markets in Thailand and Indonesia, shifting from complete vehicle exports to building factories locally.

Latin America and the Middle East are quickly scaling up; Brazil has already become the largest overseas market for several Chinese automakers. BYD, Chery, and Leapmotor have all entered local best-selling lists in both mature markets and emerging countries.

Facing this speed, the world's attitudes are not unified. Zhang Yongwei categorized these reactions into three types.

One type is restriction. Some countries feel fear, believing Chinese autos entering will cause impact, so they use barriers to delay Chinese enterprises' entry. Means include increasing localization requirements, raising import tariffs, and imposing anti-subsidy taxes.

One type is embrace. Treat the rise of Chinese autos as an opportunity, attracting Chinese automakers to build factories locally, create regional export bases, and even undertake Chinese automaker capacity as a European Bridgehead to achieve mutual win-win.

Another is anxiety. Wanting cooperation but fearing being surpassed. Local automakers watch the market being diverted and cannot keep up with the pace. At the government level, there is worry about risks, yet there is a genuine need for industrial chain cooperation. The sense of anxiety is unprecedented.

"This is a dynamic attitude change. Restrictions today, opening up tomorrow. If you can't figure it out now, you will soon understand." Zhang Yongwei said. With three attitudes coexisting, using one strategy to cover the world is definitely not viable; policies must be tailored by country.

Image Source: BYD

It's not just that overseas attitudes are significantly diverging; Chinese automakers themselves stand at a crossroad of globalization.

One type of enterprise launched a globalization strategy years ago, now accelerating overseas layout and supply chain implementation, shifting from export-focused to localized operations, aiming to become global enterprises.

Another type saw the opportunity, realizing developing only domestically is becoming harder, but lacks international foundation. They have ideas but find it hard to decide. They worry about external environmental uncertainty, fear falling into the globalization trap if international capability is insufficient, and even some enterprises that have already gone overseas are starting to feel uneasy about overseas development.

Zhang Yongwei gave a direct reminder to this waiting mindset: This globalization window period will not be long because there are too many enterprises going global. Hesitation will likely cause loss of opportunity.

From 1.0 to 2.0, China Lacks No Hard Capital

Why can this round of going global trigger such a big global response? Zhang Yongwei summarizes it as China Opportunity 2.0.

The past forty years were the 1.0 era. China opened its market to multinational enterprises, becoming the world's auto manufacturing base, bringing in, doing well the local industrial chain. Global automakers enjoyed a 40-year dividend in the Chinese market. The essence of 1.0 is Building factories in China, For China in China. Multinational automakers were the protagonists, and China provided an open big market.

2.0 is unfolding. Doors must continue to open, global factors must continue to be introduced, but China must also go out, taking accumulated manufacturing, technology, and management experience out. In the past, we passively integrated into the world; now we must actively layout globally. The auto industry can at least undertake the mission of global strategy.

The players on the stage have also changed; Chinese enterprises and multinational enterprises act together. The typical model has changed from In China for China to Utilizing China's Capacity, In China for the World.

Grasping 1.0, sharing China's market growth; Grasping 2.0, sharing China's capacity dividend. Zhang Yongwei summarized the difference between the two stages this way.

Behind this is a resource pool accumulated by China's auto industry over the past decade or more, giving China the confidence to participate globally and layout globally.

The most focused is the supply chain. China's power battery and upstream materials global capacity share exceeds 60%, possessing the world's most complete electrified supply chain. The one question that overseas-going enterprises feel most deeply is I am out, can I take China's supply chain out. Being able to ask this question itself explains that this supply chain cannot find a second home worldwide. Conversely, this supply chain must also contribute to the global auto industry. Zhang Yongwei stated as such.

Technology is also concentrating in China. Frontiers of electrification and intelligence are increasingly born, original, and installed in China. AI large model integration is shifting from following to defining directions. Smart driving and intelligent cockpits are iterating rapidly. According to Zhang Yongwei, China is becoming the source of incremental automotive technology.

Changes in product development rhythm are more intuitive. Domestic new car development cycles have been compressed to 18 to 24 months; European automakers require about 45 months. Past conventions are being broken by the Chinese rhythm.

The manufacturing end is equally tough. Among the global 201 Lighthouse Factories, China accounts for 85. Digitalized line remote control and software upgrades, automated line robots and embodied robots, constitute a vast and efficient manufacturing system.

Zhang Yongwei emphasized, 2.0 is not a shock, but a win-win. Some regard China auto's globalization as a shock, this is a misreading. For the global industry, using China's capabilities well, docking well with its own development strategy, can achieve win-win; this is the most crucial point of 2.0. If not used well, one may lose China's opportunity, missing the development dividend of this round of electrification and intelligence.

For China's industry, itself must also change thinking, walking the path of win-win cooperation. He admitted that past win-win cooperation often had cooperation but not true win-win, unable to drive mutual development. If a truly win-win path cannot be found, 2.0's opportunity will be discounted. If the relationship between external environment and self-development is not handled well, the advantages in hand may not be realized.

Revitalizing Others Also Achieves Oneself

2.0 is two-way. The world must find the docking point with China's industry, and Chinese enterprises must also find the way of win-win cooperation.

Standing from the perspective of other countries, Zhang Yongwei believes finding strategic docking points is not difficult.

The premise is to thoroughly understand the latest changes in China's auto industry; there cannot be information gaps, let alone misjudgments. The depth of China's capacity, meaning cost, speed, and the pace of technology iteration, must be seen clearly. The width of China's industry, from complete vehicles, supply chain to software, ecosystem, must also be seen fully. Misjudgment or lack of understanding makes it easy to miss opportunities.

Based on this, accurately find the strategic docking point, docking the country's market, location, and industrial endowment with China's capacity.

There are many specific docking points. For example, at the market level, the two markets can be connected; this has many practices in emerging countries. At the industrial chain level, importing China's supply chain can achieve localized manufacturing. Some countries can leverage location advantages to act as transit hubs for trade exports and manufacturing, and can also undertake global capacity reshaping to create manufacturing bases. Finding the right docking point makes win-win easier.

Placing it on Chinese enterprises themselves, win-win cooperation also has several paths to walk, and there are already cases running.

Complete vehicle traction driving supporting parts is the most direct one. This round of going global coincides with the global reshuffling of manufacturing capacity; there is much idle capacity overseas. Using a global vision to revitalize this capacity benefits both sides, not necessarily building too much new. Building complete vehicle factories locally, supporting parts follow, prioritizing joint venture cooperation to revitalize local existing factories.

Geely and Ford's joint venture factory in Spain is a typical example; joint ventures revitalize European existing complete vehicle capacity, driving supply chain localization, expected to go into operation in 2027.

Overseas capacity of parts enterprises can also be used directly. Many enterprises completed overseas layout years ago, do not need too much new building; expanding capacity can connect with this round of complete vehicle going global. China's complete vehicle going global combined with parts globalization layout together, a batch of China's global parts enterprises may run out from here.

Yanfeng is the representative, ranking 15th in global auto parts, overseas layout over 220 institutions, overseas employees about 25,000.

The role of multinational parts enterprises is worth valuing. Almost all multinational parts enterprises have realized localized development in China. In the past it was outside in, now can turn around inside out, following or supporting China's 10 million level complete vehicles to go out.

They have ready-made global networks and certification channels, can achieve seamless connection. Magna is transforming into a global service provider for Chinese automakers, Autoliv is practicing In China for the World.

A higher level idea is to empower and transform overseas local enterprises. Using OEM to revitalize idle factories, output China's manufacturing capacity, form a shared supporting system.

Zhang Yongwei gave an analogy, overseas factories do limbs and hands factories, China does brain factories. Not making overseas partners disappear, but helping them meet Chinese automaker requirements on one hand, and transform and upgrade themselves, jump in place on the other, deeply participating in China's auto industry globalization. In this way, our partners will increase, and friends overseas will also increase.

He finally raised a few specific suggestions.

At the national level, a strategic docking mechanism for the auto industry must be established, doing well bilateral coordination around industrial planning, market access, and investment policies.

At critical points like tariffs and localization rate boundaries, standard mutual recognition, cross-border data, and carbon footprint, form predictable rules, so enterprises dare to invest and dare to invest long-term. This matter, ultimately still relies on national level strategic docking to underwrite.

Falling to enterprise level, must jointly shoulder China auto brands' global responsibility. In the past everyone was used to fighting alone, now must cooperate to go global, and cooperating to go global cannot stop at verbal, must be hard constraints. Do not cluster development, do not fight evil price wars in the same market, avoid Chinese enterprises' value devaluing in internal friction.

Enterprises must also root in the local, localized operations, contribute local employment and tax, do good local enterprises. In his view, individual enterprise reputation bias affects not just itself, but the entire China auto industry brand.

100-1=0, he advocates implementing global responsibility to every going global enterprise, every product, every destination market, establishing responsibility constraint mechanisms. Global responsibility has just started, already some potential, local negatives have emerged; preventing trouble before it happens is more important than anything.

In Zhang Yongwei's view, the core landing point of China Opportunity 2.0 is to bring advanced green intelligent mobility technologies and products globally, and achieve win-win with local industries.