Three Departments Issue Document, Set Rules for Auto Companies Going Global, Risk List Includes Price War

On September 1, a document stirred the entire automotive overseas expansion circle.

The Ministry of Commerce, the Ministry of Industry and Information Technology, and the State Administration for Market Regulation jointly issued the "Guidelines on Overseas Competitive Behavior and Compliance Construction for the Automotive Industry", which is the first time domestically specifically setting a behavioral benchmark for overseas operations of auto enterprises. To put it plainly: the era of Chinese auto enterprises going global by recklessly seizing scale is coming to an end.

In the past few years, the domestic market has been highly competitive, with price wars following one after another. Many auto enterprises have directly adopted this strategy for overseas markets: willing to lose money to lower prices, relying on low prices to quickly grab orders and boost export reports. In the short term, sales data looks impressive, but hidden dangers are planted along with it.

On one hand, frequent and drastic price fluctuations have hurt local dealers and crashed the used car residual values to smithereens, making the brand cheaper and cheaper the more it sells; on the other hand, price killing without regard for cost easily gives foreign regulators grounds for criticism, and anti-subsidy and anti-dumping investigations could come knocking at any time, with the entire industry eventually having to pay the price.

This guideline does not forbid auto companies from making money overseas, but rather to brake on disorderly competition.

Highlighting a few key points: Overseas pricing cannot indiscriminately use loss-leader prices, must be based on costs and local market supply and demand; cannot adjust prices drastically on a whim to avoid drastic price fluctuations; must manage price differences between different countries to prevent cross-regional resale; meanwhile, dealer rebates and promotional marketing must comply with local laws. Besides this, overseas factory construction and production, labor protection, data cross-border for intelligent cars, and intellectual property risks are all included in the regulatory scope. It should be noted that this is a guideline document, not hard law, but the joint statement from the three departments releases a very clear industry orientation:Going global cannot focus solely on how many units are sold.

At the crossroads of tens of millions in exports, every auto company's business model is very different

A few years ago, Chinese car exports were just supporting roles. Today, we have firmly secured the number one position in global car exports.

Looking back at the data: In 2023 exports reached 4.91 million units, formally surpassing Japan; in 2024 it rushed to 5.859 million units; in 2025 it reached 7.098 million units. By 2026, the momentum is even stronger, 17 months cumulative exports reached 6.14 million units, July single month directly broke 1.04 million units, breaking 1 million in a single month for two consecutive months. Industry generally predicts that total exports this year are expected to touch the 10 million milestone.

More importantly, the structure has changed. In earlier years, exports were mostly fuel vehicles sold to developing countries, now new energy vehicles shoulder half the sky, the proportion of new energy vehicle exports has already broken through 50%. Chinese cars no longer sell only to Southeast Asia, Russia, Latin America, starting to massively enter developed markets with high thresholds such as Europe and Australia.

But under the shiny export numbers, if you look at the financial reports, the situation varies greatly for each company.

First tier, overseas has become half of the company's lifeblood. Chery, longtime champion in domestic brand exports, overseas revenue accounts for more than half, roots in emerging markets are very deep, running fuel and new energy lines, guarding the basic market while aggressively attacking Europe. BYD's overseas growth momentum is fierce, first half of 2026 overseas deliveries close to 790,000 units, overseas sales account for more than 40% of total sales. What is rare is, its overseas gross margin is even higher than domestic, truly making a profit on every unit sold. Factories in Thailand, Indonesia, Hungary, Brazil are landing successively, dual layout of emerging and developed markets. SAIC MG rooted in Europe; Great Wall Motor's overseas revenue has already exceeded domestic, making a big layout for heavy-asset factories in Brazil.

Second tier, overseas is an important increment, still climbing. Geely revives idle overseas factories, attacking the European high-end market; GAC takes the Indonesia factory as an ASEAN stepping stone, Aion enters Europe through OEM mode; Changan deeply cultivates Russia, Latin America, Brazil factory landing drives export rise rapidly.

New Forces play a different game.

Leapmotor relies on cooperation with Stellantis for OEM, entering Europe with light assets; Xpeng, NIO aim directly at the European high-end market. They generally are unwilling to participate in low-price killing, prioritize guaranteeing overseas gross profit, just the overall export base is still relatively small.

Reality is cruel: exporting tens of thousands to over 100,000 units, some enterprises achieve profitability through scale; others only exchanged for paper sales, overseas gross margin continues to be under pressure, belongs to "selling more, earning thinner", this is exactly the situation the policy wants to constrain.

The opportunities of going global are right before our eyes, but the pitfalls are equally numerous.

The wave of electrification has indeed opened a global door for Chinese automobiles.

In the fuel vehicle era, Europe, US, Japan tightly grasp brand and technical barriers, we find it hard to break through. But switching to the new energy track, domestic complete three-electricity industry chain, 800V high-voltage platform, smart cockpit and intelligent driving capabilities, became the trump cards in our hands. From batteries, parts to complete vehicles, complete industrial clusters can quickly respond to differentiated demands of various countries globally.

Domestic market fierce internal competition intensifies, existing market competition becomes more intense, overseas naturally became the second growth curve for auto companies. Southeast Asia, Latin America auto consumption is still in an upward cycle, Europe new energy replacement demand is strong. Going global is no longer just exporting cars to sell, factory building, supply chain, charging ecosystem whole system, all going out with.

But behind the glory, realistic challenges are no small amount.

Trade barriers are getting thicker/denser. EU anti-subsidy investigations, carbon tariffs, battery regulations increasing layer by layer, many countries in North America, Latin America raised tariffs, requiring local production, the path of simply transporting domestic complete vehicles to sell is getting narrower. Once geopolitical environment changes, exchange rate fluctuations and exchange gains/losses could swallow enterprise profits at any time.

Domestic involution is spilling outwards. Phenomenon of low-price grabbing share in some markets is common, export data looks good, but profits don't go up. Frequent price adjustments hurt used car residual values, also continuously amplify external regulatory risks.

Many auto companies are still stuck at "product going global", still far from true globalization. Overseas after-sales network, parts support can't keep up with user demands; Factory building heavy asset investment is large, cycle is long, also need to adapt to local labor, regulatory environments.

Brand shortcomings are even an unavoidable challenge. Many overseas consumers' inherent impression of Chinese cars is still low price, wanting to break into high-end, the road ahead is still long. Smart car going global, data compliance, privacy, intellectual property, every item is an invisible threshold, stumbling could directly lose a regional market.

The era of tens of millions in exports is imminent. In the past, measuring success of going global was seeing how many units exported. And next, sales volume is just the starting point. How to balance scale, profit, compliance, and brand is the real exam in front of all auto companies going global.

Source: Car Observation