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The US Hasn’t Noticed That China-Made Cars Are Taking Over the World – Bloomberg - 26.01.23

Writer's picture: Michael JulienMichael Julien

The country is poised to become the No. 2 exporter of passenger vehicles, surpassing the US and South Korea and risking new tensions with trading partners and rivals by Tom Hancock.


When Andreas Tatt, a manager at a greeting card company in Canterbury, UK, was interested in buying a new car, he knew he’d go electric. But after considering a Tesla Model 3 and the Porsche Taycan, he settled on a less familiar choice: a yellow-gold, battery-powered Polestar 2 manufactured by Volvo and its Chinese parent Zhejiang Geely Holding Group Co.


“It turns a lot of heads, partly due to its color, partly due to people not knowing what it is,” says Tatt, who waited four months for the vehicle to be shipped from Luqiao in eastern China. “I did have some concerns that the build quality may not be the best,” he says. “Upon test driving, any doubt of quality issues was put to rest.”


As China’s auto brands woo more and more foreign customers like Tatt, the nation is poised to become the world’s No. 2 exporter of passenger vehicles, a milestone that could reshape the global auto industry and spark new tensions with trading partners and rivals.


Overseas shipments of cars made in China have tripled since 2020 to reach more than 2.5 million last year, according to data from the China Passenger Car Association. That’s only a whisker (about 60,000 units) behind Germany, whose exports have fallen in recent years. China’s numbers, behind Japan but ahead of the US and South Korea, herald the emergence of a formidable rival to the established auto giants.

It’s just the beginning, according to Xu Haidong, deputy chief engineer at the state-backed China Association of Automobile Manufacturers. The target is to sell 8 million passenger vehicles overseas by 2030—more than twice Japan’s current shipments, he says.


The trend underscores that China has moved beyond being the “world’s factory” for low-cost consumer electronic devices, appliances and Christmas toys. By shifting to more complex and sophisticated products for competitive, highly regulated markets, Chinese companies are moving up the value chain in manufacturing—a key driver of growth that transformed the once-struggling communist economy into today’s quasi-capitalist $18 trillion juggernaut. Indeed, the Economic Complexity Index compiled by the Growth Lab at Harvard University, which analyzes the range of products a country exports, ranks China 17th in the world, a rise from 24th a decade ago.


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