top of page

Introducing China's Auto Industry (Part 3)

This article is the final installment of our Overview of China's Auto Industry series. In Part 1, we examined the size and scale of China's automobile industry in the global context and summarized key policy developments that shaped the sector's evolution. In Part 2, we introduce a selection of the top 15 Chinese auto companies and present statistics on China's bestselling automakers and car models. In this article, we discuss some key trends that can shape and define the future of China's auto industry.

This article is part of our China auto industry series, which includes:


Click here to subscribe and stay tuned for future updates!

The Future of China's Auto Industry

Several key trends are discussed below.

#1: The Rise of Chinese Auto Brands

2022 saw a surge in demand for domestic-branded cars in China with Chinese brands accounting for 49.9% of all mainland China passenger vehicle sales during the year. We think this trend is likely to continue, particularly in the electric vehicle sector, as Chinese brands continue to innovate and offer a variety of products to consumers across a wide range of price points. Although superior value-for-money (compared with other cars of a similar price range by competitors such as European or Japanese automakers) has been a key selling point of Chinese auto brands, we think consumer confidence in domestic brands will continue to grow, allowing Chinese automakers to further penetrate the premium auto market with domestic-branded cars. We also anticipate a continued penetration of Chinese auto brands into offshore markets in the coming future.

Chinese Domestic Auto Brand Sales
Data Source: China Passenger Car Association (CPCA)

Note: percentages indicate the percentage of domestic brand sales as a proportion of total (i.e. domestic and foreign) passenger vehicle sales in China during the year

Note: data provided by the CPCA dates back to 2009 and is accurate to the nearest ten thousand

#2: China's Growing Prominence As A Global Car Exporter

China's total (i.e. passenger and commercial) export volume of automobiles increased significantly to 2,015,000 vehicles in 2021 and 3,111,000 vehicles in 2022 compared with figures which rarely exceeded one million vehicles over the past 16 years.

From a global perspective, China was the second largest exporter of cars in 2022, ahead of Germany which ranked third with a total export volume of 2,647,622 passenger cars* according to the German Association of the Automotive Industry (VDA), and behind Japan which ranked first with a total export volume of 3,813,269 vehicles according to data from the Japan Automobile Manufacturers Association (JAMA). According to Nikkei Asia (here), China overtook Japan to become the world's top automobile exporter in Q1 2023. Based on data from the China Association of Automobile Manufacturers (CAAM), China exported approximately 1,069,000 vehicles during the first quarter of 2023, compared with approximately 950,000 vehicles exported by Japan according to JAMA. Looking at the recent trend, we think it is highly plausible that China will become the world's top auto exporter by the end of this year or within the coming few years.

*we did not find a figure for commercial or total vehicle exports on the VDA website

China Automobile Export Volume
Data Source: China Association of Automobile Manufacturers (CAAM) (click image to enlarge)

Note: data provided by the CAAM is accurate to the nearest ten thousand

We turn to look briefly at China's top auto exporters in 2022. The graph below shows the total (i.e. passenger and commercial) export volume from the top ten auto exporters in China (including both foreign and domestic brands) during the year. SAIC (上汽集团) ranks first with 906,000 exported cars, followed by Chery Automobile (奇瑞汽车) in second place with 452,000 cars and Tesla in third place with 271,000 cars. Subsequently, Changan (长安汽车) came in fourth with 249,000 exported cars, while Dongfeng (东风汽车) came in fifth with 242,000 cars.

Note: an overview of China's largest and most noteworthy auto companies is available in Part 2, with links to more detailed company analysis series where available.

China's Top Auto Exporters 2022
Data Source: China Association of Automobile Manufacturers (CAAM)

Note: data provided by the CAAM is accurate to the nearest ten thousand

JAC Motors (江淮汽车)(SHA: 600418) is a smaller state-owned auto company that focuses on commercial vehicles. In 2022, the company had a total production volume of 500,400 vehicles, of which 115,000 was exported.

Sinotruk (中国重汽集团)(HKEX: 3808)* is a state-owned truck manufacturer with a particular focus on heavy-duty trucks.

*this is the stock ticker for Sinotruk Hong Kong, a subsidiary of Sinotruk

#3: China's Large Markets For Premium And Value-For-Money Cars

China's average annual disposable income doubled over the past ten years from RMB18,311 per capita in 2013 to RMB26,883 per capita in 2022 and is expected to keep rising. We believe that, in the long run, the market for premium automobiles in China will continue to grow in tandem with this continued rise in income. At the same time, given China's large population, we think that there will continue to be a sizable market for value-for-money cars.

China Average Disposable Income
Data Source: National Bureau of Statistics of China (click image to enlarge)

Note: the National Bureau of Statistics of China stopped releasing urban versus rural averages starting in 2019

#4: The Advent and Future of China's Auto Price Wars

The first quarter of 2023 was characterized by an unanticipated price war among auto companies in China as automakers took turns slashing prices in order to attract more customers. We provide a summary of key events below.

Summary of China Auto Price War

Although the auto price war seems to have ceased for now, we expect that there will be continued competition in the value-for-money space in the short to medium run as Chinese consumers have less appetite for consumption and as China's economy has yet to fully bounce back following the COVID pandemic.


Click here to subscribe and stay tuned for future updates!


China Auto

An Overview of China's Auto Industry: Part 1, Part 2, and Part 3

Standard State-Owned: Changan Automobile, SAIC (Part 1 and Part 2)

Value-For-Money State-Owned: Wuling Motors

Traditional Private: Great Wall Motor, Geely, BYD (Part 1 and Part 2)

Electric Vehicle Start-Ups: NIO, XPeng, Li Auto

China E-Commerce

More on China



bottom of page