China Surpassed Japan as Global Vehicle Export Leader in 2023

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Rapid Growth in Electric Cars Propels China to The Forefront of Global Vehicle Exports

China has surpassed Japan as the world’s leading vehicle exporter, according to data released by the Japan Automobile Manufacturers Association (JAMA). The figures, disclosed on Wednesday, underscore the transformative growth of the Chinese auto sector, driven primarily by substantial investments in electric cars – an area where Japanese firms have exercised more caution.

JAMA reported that Japan shipped 4.42 million vehicles in 2023, while the China Association of Automobile Manufacturers indicated earlier this month that China exported 4.91 million vehicles. China’s customs bureau, however, reported an even higher figure of 5.22 million, marking a remarkable year-on-year increase of 57%, with one in three vehicles being fully electric.

China had already been consistently outpacing Japan in monthly vehicle exports, and the latest data solidifies its position as the top vehicle exporter for the entire year. Unlike their Chinese counterparts, Japanese automakers, including the world’s largest company by unit sales, Toyota, manufacture substantial volumes of vehicles in various countries.

In 2022, Japanese vehicle production, excluding motorcycles, totaled 7.84 million units, while overseas production reached almost 17 million units.

Japanese automakers have traditionally focused on hybrid models, combining battery power and internal combustion engines, exemplified by the iconic Toyota Prius. However, the market landscape is evolving, with electric vehicle (EV) adoption in Japan lagging behind Western counterparts.

China is the world hub for electric vehicles and consumers there really want the Cybertruck pic.twitter.com/Zom0eWK0TA

— Teslaconomics (@Teslaconomics) January 30, 2024

In 2022, only 1.7% of cars sold in Japan were electric, compared to approximately 15% in Western Europe, 5.3% in the United States, and nearly one in five in China.

In response to this shift, Japanese automakers, particularly Toyota, have pledged to enhance their EV offerings. Toyota aims to sell 1.5 million EVs annually by 2026 and 3.5 million by 2030. The company is heavily invested in battery technology, with a focus on mass-producing solid-state batteries, promising faster charging times and extended ranges.

China’s success in the electric vehicle sector has not been without challenges, as regulators in Western markets raise concerns about anti-competitive practices, including alleged price-dumping. European Commission president Ursula von der Leyen announced an investigation into Chinese state subsidies for electric cars in September, potentially leading to duties on cars perceived as unfairly undercutting European competitors.

Christopher Richter, an auto analyst at CLSA, likened China’s rise in the automotive export market to Japan’s trajectory in the 1980s. Richter highlighted that Japan addressed similar challenges by establishing overseas factories, a strategy China may consider as it continues its automotive expansion.

Mackenzie M February 2, 2024