China’s Auto Export Dominance to Slow Down in 2025
Global Leadership Under Threat
China’s reign as the world’s largest auto exporter is expected to slow down significantly in 2025, with no growth predicted for electric vehicle exports. According to the China Passenger Car Association (CPCA), car exports surged 25% to 4.8 million units in 2024, securing China’s position as the top auto exporter for the second consecutive year.
Tariff Pressures and Market Shifts
The expected drop in shipments to Russia, combined with tariff pressures in Europe, will contribute to the cooling of export growth to 10% this year. Furthermore, exports of electric cars and plug-in hybrids, known as new energy vehicles (NEVs), are forecast to experience zero growth. This comes after a 24.3% increase to 1.29 million units in 2024.
Key Markets and Players
Russia, Mexico, and the United Arab Emirates were the top three markets for China-made cars in the first 11 months of 2024. Meanwhile, exports to Thailand, Australia, and Britain declined. Establishing production facilities in Europe, such as BYD’s in Hungary, will help Chinese carmakers gain market share in the region.
Domestic Market Growth
In China’s domestic market, car sales maintained their growth pace in 2024, with EV and plug-in hybrid sales hitting a record high. Local leaders like BYD, Geely, and Xiaomi benefited from the growth, while Tesla’s China sales reached a record high. Foreign automakers, including General Motors, Toyota, and Volkswagen, continued to struggle in the competitive market.
Government Incentives and Industry Outlook
The Chinese government’s extension of auto trade-in subsidies into 2025 is expected to boost demand by 3.0 million units. NEV sales are predicted to rise 20% to make up 57% of China’s total car sales. However, the industry faces challenges, including deteriorating profitability and an extended price war that has forced suppliers and dealers to cut prices.
Market Projections
Overall, car sales are estimated to grow 2% this year, with NEV sales expected to rise 20%. Despite the growth, China’s auto industry faces significant challenges, including declining profit margins and intense competition.
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