China comes just shy of Japan as the world’s largest car exporter

LIANYUNGANG, CHINA – JANUARY 17, 2024 – A large number of cars are ready to be shipped for export at the port of Lianyungang, Jiangsu province, China, January 17, 2024. (Photo credit should read CFOTO/Future Publishing via Getty Images)

Future Publishing | Future Publishing | Getty Images

BEIJING — China failed to replace Japan as the world’s largest exporter of cars in 2023, despite coming close to doing so, data released this month showed.

Japanese customs data showed the country exported 5.97 million vehicles last year, more than the 5.22 million vehicle exports that China customs data reported.

More than 70% of China’s car exports in 2023 were of gasoline-powered vehicles, according to the Ministry of Commerce, noting that new energy vehicle exports were growing rapidly.

Many of those gasoline-powered cars went to Russia, said Sarah Tan, economist at Moody’s Analytics.

“After Russia’s invasion of Ukraine in February 2022, many auto manufacturers had left the country only to have that gap filled by Chinese manufacturers,” she said. “In the first eleven months of 2023, auto shipments to Russia rose about six times that of 2022 in value terms.”

Mexico was also a major destination for Chinese exports of gasoline-powered cars, Tan said, while auto exports to Belgium and the U.K. were mostly new energy vehicles.

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In fact, Mexico was the second-largest destination for Chinese cars after Russia, said Jorge Guajardo, Washington, D.C.-based partner at Dentons Global Advisors and a former ambassador of Mexico to China.

Chinese-made cars have quickly increased their share of Mexico’s auto market, a “new phenomenon” since the central American country has traditionally been highly protective of its auto industry — the top employer in Mexico, Guajardo said in a phone interview.

While he said it’s still unclear exactly why Chinese cars are growing so quickly in Mexico, part of the reason is international automakers.

“The factories, the plants that they had in China that were meant to be for the Chinese market that which they’ve now lost, you’re going to start redirecting that capacity to export from China abroad,” he said, noting he think’s “there’s a lot of overcapacity in China for auto manufacturing.”

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“I think they’re gonna very soon realize that they’re targeting the wrong sector,” Guajardo said.

Chinese-made “EVs are superior to any operating [the Europeans] have, so you’re just trying to block something that is better,” he said, adding that those electric cars ultimately aren’t the majority of China’s auto exports.

Guajardo expects these developments will lead to trade wars, at least in the case of Chinese car sales to Mexico.

“I wish it were EVs because if it were EVs, not only are they good but they are a quality product that save the environment,” Guajardo said. “Gasoline-powered cars are just a competition with Mexican products.”

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