China has extended its lead over Japan in the car export industry during the first half of 2023 as demand continues to rise globally for electric cars.
Vehicle shipments from major car makers in the world's second-largest economy surged by more than three quarters to 2.14 million units in the first six months of the year, the latest figures from the China Association of Automobile Manufacturers showed.
This has largely been fuelled by a rise in demand for new electric vehicles – a category defined by Beijing as being fully or predominantly powered by electricity – which soared by 163.5 per cent to 516,000 million units, the CAAM said.
China became the world's second-largest auto exporter last year when its exports rose by 54 per cent to more than 3.1 million, according to Chinese customs data.
This allowed the country to surpass Germany, the long-time second-placed car exporter, and become a real threat to then market leader Japan, whose exports increased by 6 per cent in 2022.
Beijing's push in the electric vehicle market, which has been providing more affordable alternatives globally, has significantly boosted the sector's growth.
Electric vehicles will make up about half of all new car sales worldwide by 2035 as the push for net-zero carbon emissions accelerates, according to Goldman Sachs.
EV sales will soar to about 73 million units in 2040, up from around 2 million in 2020, while their share of worldwide car sales is projected to rise to 61 per cent from 2 per cent during the same period, according to the US-based investment bank.
China's rise through the ranks has been made possible by its car makers continuing to improve their technology, design and manufacturing processes, allowing them to gain market share in new regions and address brand recognition issues, particularly in the European market, analysts at S&P Global said in a recent report.
“Part of that rapid growth was due to Chinese car makers capitalising on the shortage of chips and other core components among legacy western OEMs' far-flung supply chains,” S&P Global said.
“By contrast, many Chinese car makers have access to a complete industrial chain, which helped rapidly increase capacity while western car makers had to cut production.”
