China overtakes Germany to become second largest car exporter… Korea ‘Fire in the instep’

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China overtook Germany to become the second largest car exporter last year. This is the result of putting forward the export of eco-friendly vehicles such as electric vehicles based on the vast domestic market and government funding.

According to the “2022 China Automotive Global Market Export Status and Implications” report released by the Korea Automobile Manufacturers Association (KAMA) on the 25th, the number of automobile exports in China last year was 3.11 million units, an increase of 54.4% from the same period last year.

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Japan, which sold 3.2 million units as of November last year, ranked first. China ranked second, overtaking Germany, which sold 2.61 million units during the same period. Korea is expected to rank sixth with a provisional 2.3 million units behind China’s growth.

China’s automobile exports have remained at around 1 million units for the past five years, but have been on a sharp rise since 2021. It was eco-friendly vehicles, including electric vehicles, that boosted sales. Exports of eco-friendly vehicles (electric vehicles, plug-in hybrids, hydrogen electric vehicles), which are called “new energy vehicles,” soared 120% year-on-year to 860,000 units.

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In particular, about half of China’s electric vehicle exports are produced by Tesla in the United States at its Shanghai plant in China. As of the first half of last year, Tesla exported 97,182 units in China, accounting for 48% of China’s 202,000 new energy vehicle exports in the first half.

Exporting countries also diversified. In the past, China exported automobiles to places with low per capita income or political closeness, such as Russia, Iran, and Latin America.

Since the Russian invasion of Ukraine, Chinese companies have filled the gap left by global automakers such as South Korea and Japan, and as of January-November last year, Russia’s market share increased by 31%. The average export unit price also increased by 30% from $12,900 (about 15.92 million won) in 2018 to $164 million (20.24 million won) last year.

Chinese local brands are also rapidly expanding overseas production bases. BYD, which is competing for the top spot in electric car sales with Tesla, is currently negotiating to acquire Ford’s German production plant in the United States, and is set to enter the Japanese passenger car market at the end of this month.

The Automobile Industry Association said that it is urgent to prepare a full-fledged incentive policy to attract domestic electric vehicle production facilities and expand investment, concerned that China will rapidly emerge as a competitor in the electric vehicle market in the future. There are also voices calling for new markets to be opened up by quickly signing new free trade agreements (FTAs) with markets with great growth potential, such as the Middle East and Latin America.

Gangnam-hoon, chairman of the Korea Automobile Manufacturers Association, said, “Half of China’s electric vehicle exports are Tesla products.” do,” he said.

“We need to improve the competitiveness of automobile exports through strategies to strengthen the production base and competitiveness of the domestic automobile industry, such as promptly enacting the ‘Special Act on Future Cars’ for the industrial structure transition to future cars and securing labor flexibility,” he said.

Source: Donga

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