China's auto export industry climbing to the top

China expected to surpass Japan and South Korea to become the world's largest auto exporter in the future, the People's Daily reported on Tuesday, citing an expert.

China's auto export has seen robust growth in the past two years which shows that the country's auto industry chain has strong resilience, although it faced the repeated impact of the COVID-19 pandemic, said Cui Dongshu, secretary-general of the China Passenger Car Association.

Due to the COVID-19 pandemic, the world auto industry chain appeared risk-averse adjustment, resulting in a sharp contraction in the supply of low-end automotive chips. China seized the market development opportunities, based on its industrial chain advantage to realize the auto export grew strongly.

In 2021, the country sold more than 2.13 million vehicles in the export market, surged 102 percent year-on-year, and the figure realized over 50 percent growth in the first 10 months of this year.

Sufficient production capacity is key to promoting the auto export, Cui said. According to the China Passenger Car Association, the production of passenger cars bottomed out at 1.49 million units in August last year and quickly rebounded to 2.47 million units in December last year.

Western Europe and South Asia are the main export destination for the domestic new energy car. This year, the auto export to Belgium, Slovenia and the UK became new bright spots, and the export to Thailand, the Philippines and Southeast Asia are also recovering well. Moreover, China's export to Mexico and Chile also showing strong momentum, and the export of the new energy cars has gradually picked up.

The lack of production capacity and shrinking sales in Europe and American auto companies also have given China the opportunity to develop its auto industry, Cui said.

Due to the shortage of automobile production in Europe and America, the inventory of finished cars is seriously out of stock, the price of used cars is skyrocketing, the export of new cars and used cars is obviously declining.

The data from Cui Dongshu showed that the dealers inventory in the US was 2.74 million vehicles at the end of 2020, while the figure was 1.12 million vehicles in 2021, which declined 59.1 percent year-on-year. In July, the figure was slashed further to 1.02 million vehicles. Besides, the average retail price of a car hit a nearly eight-year high of $42,379 in 2021 due to the chip shortage.

With the country implementing wider opening up, Tesla and other international auto companies have settled in China, which drives China's automobile industry chain upgrade, Cui said.

The new energy car exports have become an important growth point in the past two years. According to the China Passenger Car Association, China exported 223,000 new energy cars in 2020, and the figure reached 588,000 vehicles in 2021.

The passenger car export has a large room for growth, especially with good expectations had in Europe, Mexico, which has become an important driving force to the China's auto export for growing, said Cui.