At the moment, China continues to be the largest country in the world in terms of vehicle manufacturing, but also in terms of sales. And it has held that position since 2009. The Asian country accounts for 30% of the world’s production, which exceeds the quota of the European Union (EU) or those of the United States and Japan combined.
Their cars do not yet appear in the lists of best-selling vehicles because they mostly remain in the local market, but it is a matter of time before they go abroad with force.
Local annual production is estimated to reach 35 million units by 2025. According to data from the Ministry of Industry and Information Technology, more than 25 million vehicles were sold in 2020, including 19.99 million passenger vehicles, 6.5% less than in 2019. Commercial vehicle sales reached 5.23 million, an increase of 20% compared to 2019 figures.
The first years of local production, commercial vehicles for industry and the army were created, but from 1990, the impulse of the local market took the lead in the sector. Already in 2019, 22 million units were sold, five times those sold in 2005.
The growth of the Chinese market has attracted many foreign brands well established in the international market to invest in local production. However, they were only allowed to produce their vehicles in the country through ‘joint venture’ with local car companies. The government has announced that it will gradually lift these restrictions, coinciding with the increase in Chinese exports.
In fact, China is increasingly selling more cars abroad thanks to technical developments and low production costs. At the moment, barely 4% of production leaves China, but changes are coming to facilitate the export of new locally produced electric vehicles, as well as the electrification of the Chinese car park. Among them, tax rebates, subsidies and the obligation for the public park to be electrified.
In addition, electric vehicle manufacturing companies have received financial support from the government to reduce research and development costs.
All this has boosted the Chinese electric vehicle and has gone from 17,500 units in 2013 to more than 1.2 million in 2020. And it is that China wants to use a world-leading industry at a time when there is a trend towards electrification of vehicles to compete with large international companies, which are specialized in combustion engines.
A difficult sector to invest in
The international automotive industry faces the need to move towards the electric vehicle. The large companies in the sector still base their sales figures on combustion engines, but are working on electrification. Taking advantage of the slowness with which the change is taking place, several companies specializing in electric vehicles have emerged around the world, such as the American Tesla or the Chinese Nio or Geely.
The well-known company in the sector is Tesla, since it has become the first company in the sector by market value. In recent years, its appreciation has skyrocketed and it has become the object of desire for many international traders.
That has not happened with other Chinese companies because buying them was very difficult for a Western trader. Today it is easier to trade Nio shares, soon it will be easy to get information about the company’s figures and it will not take long to see Nio on the streets of Europe and America.
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