Total vehicle exports from China increased by 24.3% year-on-year in October, with year-to-date exports up 27.46%, but passenger vehicle exports grew fastest with annual growth of 42.9% during the month.
IHS Automotive perspective | |
Significance | Chinese vehicle exports are growing by double digits, but it is passenger vehicles that are seeing the strongest growth with volumes of 60,741 units exported in October and a total of 547,356 units exported in the first 10 months of the year. |
Implications | The main contributors to the high growth rates in Chinese exports are local automakers, Chery, Geely, Lifan, and Great Wall, which account for 29.4%, 14.95%, 12.08%, and 8.31% respectively of total year-to-date passenger car exports. |
Outlook | Chinese automakers are pushing exports to markets often outside the main focus of international automakers, giving them a much-needed boost to sales. |
Total vehicle exports from China rose 24.43 % year-on-year (y/y) in October to 86,664 units, with year-to-date (ytd) exports in the first 10 months growing 27.46% y/y, hitting 871,376 units, up from the 683,661 units exported during January–October 2011.
In October, passenger vehicle exports from China rose to 60,741 units during the month, an annual increase of 42.90%. On a year-to-date basis, a total of 547,356 passenger vehicles were exported from China, rising 36.14% year-on-year (y/y) during the first 10 months of the year. Exports of commercial vehicles, therefore, were 25,923 units in October, with ytd exports of 324,020 units in the first 10 months of the year.
Passenger vehicle exports have become the main driving force of growth for Chinese domestic automakers, which are facing increasing competition in their domestic market, often from international players, which are almost crowding out the local Chinese brands. However, Chinese automakers are foraying into markets generally outside regions targeted by international automakers, allowing them to achieve growth.
Local Chinese brands push exports
Chery has become the major contributor to Chinese vehicle exports. In October alone, Chery saw exports of 14,777 units, an annual increase of 17.14%. In the first 10 months of the year, the automaker exported 161,164 units, an increase of 20.99% y/y and accounting for 29.4% of the total passenger vehicles exported from China.
Geely is the second-largest contributor to exports with total monthly exports in October of 12,204 units, an annual increase of 127.05% over the same month last year. On a ytd basis, Geely exported 81,804 units, an increase of 183.34% over the 28,871 units exported in the first 10 months of 2011.
Lifan is the third-largest contributor to Chinese vehicle exports with total exports in October of 11,517 units, an increase of 280.73% y/y. On a ytd basis, Lifan exported 66,145 units in the first 10 months, an increase of 67.25% y/y.
Great Wall is the fourth-largest player in the passenger vehicle export segment. The automaker exported a total of 4,376 units in October, an increase of 16.07% y/y, with ytd exports of 45,472 units, up 22.6% y/y. Great Wall also exports light commercial vehicles, which are not counted in this analysis of passenger vehicle exports.
Other local Chinese automakers have also seen growth in exports in the passenger vehicle segment. Brilliance exported 2,702 units in October and 11,076 units in the first 10 months of the year. Jianghuai Auto Corp (JAC) exported 2,028 units during the month and ytd exports were 24,956 units in the first 10 months. SAIC exported 197 passenger cars in October and 2,803 units in the first 10 months. Zotye Auto exported 579 units last month and 7,236 units during January–October, while ZX Auto exported 85 units in October and 926 units in the first 10 months. However, BYD's exports in the passenger vehicle segment dropped to zero during October and ytd exports were 10,074 units.
Chinese export destinations
Chinese vehicle exports, including commercial vehicles, are mainly to developing markets. Often these markets are not huge volume destinations and, therefore, are not of high priority to international automakers. In the first nine months of the year, the biggest market for Chinese vehicles was Algeria, followed by Russia, Iraq, Iran, Chile, Colombia, Venezuela, Peru, Ukraine, Egypt, and Saudi Arabia.
Outlook and implications
Chinese passenger car exports have risen, with larger volumes than in 2011. Chinese automakers are spreading exports to a wide range of markets in a bid to raise volume sales. Chinese automakers are also developing strategies to gain volume growth in foreign markets, which often involves local production of models.
So far, most Chinese models are exported as fully built units, with some exported as knock-down kits for assembly at plants in other countries. However, Chery plans to begin full production at a plant in Brazil at the end of 2013, marking the first full-production plant of a Chinese automaker outside of China. This implies that Chery's suppliers will also have set up production facilities near the automaker's new production base. In addition, Geely has been pushing for bases outside of China. Both Geely and Chery have assembly plants in foreign countries, often with local partners, but full-production plants are rare for Chinese automakers.
On Geely's overseas expansion, the automaker's chairman and founder, Li Shufu, said: "My vision is to sell outside of China the same number of cars as we sell within China." Geely's main export markets in the first six months of the year were Russia, Iraq, Saudi Arabia, Ukraine, and Chile, according to the automaker. Geely exported just over 10,000 units to Russia, around 9,000 units to Iraq, and just over 8,000 units to Saudi Arabia during January–June. Geely has distribution networks in 49 countries outside of China, with plans for localisation in major emerging markets such as India, Iran, and Brazil (see China: 6 September 2012: Geely Plans Plants in India, Iran, and Brazil). In addition, Geely is expected to begin assembly of models in Belarus this year (see China: 24 September 2012: BelGeely to Begin Car Assembly by Year-End).
Meanwhile, markets such as Iraq and Iran offer high-growth opportunities for Chinese automakers. BYD has recently announced its largest-ever single export order from Iraq. The order is for 6,500 gasoline engine cars for its dealer in Iraq (see China: 1 November 2012: BYD wins largest export order from Iraq). Chery has claimed that its total cumulative exports to Iraq will hit 30,000 units (see China: 9 November 2012: Chery's cumulative exports to Iraq to hit 30,000 units). In addition, Lifan has recently announced it has sold 500 of its X60 sport utility vehicles (SUVs) in Iran (see Iran: 8 November 2012: China's Lifan sells 500 X60 SUVs in Iran).