Chinese auto exports surge, offsetting domestic sales decline

In Beijing, Chinese auto sales experienced a significant decline in June, dropping by 7.4% compared to the previous year, totaling 1.8 million cars. However, this decline was offset by a notable increase in exports, which rose by 29% to 400,000 units during the same period. The China Association of Automobile Manufacturers reported that in the first half of the year, exports surged by 31.5%, while domestic sales saw a modest increase of 1.6%. The rise in exports has raised concerns in Europe and the United States about the potential impact of competitively priced Chinese cars on established automakers in the West. While attention has been on China's electric cars, the growth in exports has primarily been driven by gasoline-powered vehicles, which saw a 36% increase and accounted for 78% of vehicle exports. Chinese EV exports decreased by 2.3%, while hybrids experienced a significant jump of 180%. Major export markets for Chinese automakers include Russia, Brazil, Mexico, the United Arab Emirates, Saudi Arabia, Belgium, and the U.K. The European Union recently imposed provisional duties on Chinese electric vehicles, citing unfair advantages due to government subsidies. In response, Chinese manufacturers are expanding production overseas, with BYD, the largest EV maker in China, opening a plant in Thailand and planning factories in Brazil, Hungary, and Turkey. The decline in auto sales in China for the second consecutive month has been attributed to a severe real estate slump, which has negatively impacted economic growth and consumer confidence. Despite the domestic challenges, the robust performance of Chinese auto exports has helped mitigate the slowdown in the local market, with gasoline vehicles leading the export growth while EVs and hybrids also showing promising trends.