In The First Half Of The Year, Auto Exports Surged By 115% To Seize The Market Of New Energy Vehicles In Europe

The automobile market in the first half of the year can be described as "two flowers inside and outside the wall".

Recently, according to the data released by the China Association of Automobile Manufacturers (hereinafter referred to as the "China Association of Automobile Manufacturers"), in the first half of this year, domestic automobile exports totaled 828000, up 115% year on year, including 631000 passenger cars, up 118% year on year.

In the recent June, the scale of domestic automobile exports also reached a record high: the overall automobile exports reached 158000, up 150% year on year and 5.0% month on month, including 120000 passenger cars, up 170% year on year and 3.7% month on month.

The gradual control of overseas epidemics has led to a surge in demand, which is the main reason for the significant increase in China's automobile exports. In addition, driven by Tesla, SAIC MG and other brands, new energy vehicles have also started a big step of "going global". Data shows that 82000 new energy passenger vehicles were exported from January to June, up 342% year on year.

European emission regulations are becoming stricter, and it is also one of the largest new energy vehicle markets in the world. Since last year, domestic automobile enterprises have accelerated their layout in the European market, and the sales volume of new energy vehicles in the European market has also become an important engine for overall export growth.

Auto enterprise exports enter the 2.0 era

From the perspective of sales volume, this year's automobile export is rising significantly. If the base of auto exports last year was low due to the COVID-19 epidemic, this year's auto exports also grew significantly compared with 2019.

According to the data of China Automobile Association, compared with the first half of 2019, domestic automobile exports increased by 70% this year, including passenger car exports increased by 90%. Measured by the export volume of half a year, Chinese auto enterprises have reached a new high this year.

On July 13, Xu Haidong, deputy chief engineer of the China Automobile Association, told reporters of the 21st Century Business Herald that the increase in export data in the first half of the year was mainly related to factors such as the recovery of the international market, the improvement of the competitiveness of Chinese brand cars, a more comprehensive overseas layout of car enterprises, and the growth of new energy vehicle exports.

In the first half of the year, the epidemic situation in various overseas markets gradually eased. After the epidemic, travel demand surged, and the automobile market rarely became a seller's market in short supply. Under this situation, Chinese automobile enterprises that had resumed production capacity as early as last year had certain advantages.

The direct impact of the epidemic on China's automobile production has been very small, mainly because chip supply will be affected, but many overseas factories' production has stagnated, resulting in the original shortage of supply, which has brought more opportunities for Chinese automobile enterprises' automobile exports.

The surge in demand for cars and travel is omnidirectional. The 21st Century Business Herald reporter had previously paid attention to the US market, which has also just recovered from the epidemic. The prices of new cars, second-hand cars and rental cars in the US market have all seen a rare surge. The latter two also directly promoted the year-on-year growth of the US CPI in May by 5%, the largest year-on-year growth in 13 years.

Automobiles have become popular products in many overseas markets. Yu De, assistant president of SAIC Group and general manager of the International Business Department, said that the prices of SAIC's exported cars have increased in many regions this year, and the current prices are still tentative and flexible, especially for some models.

However, Yu De also pointed out that the main reason for the rise in car prices was the rise in precious metal prices at the beginning of the year and the soaring logistics costs caused by the epidemic. "The logistics cost is too high. This year, a box will cost seven or eight thousand dollars, or even 10000 dollars." Yu De laments that the stability of the supply chain is too important. Therefore, SAIC has opened several self operated international routes, operated by its Anji Logistics. In March this year, SAIC and COSCO Shipping jointly established a logistics company to further guarantee the supply chain.

Behind SAIC's proprietary international routes, Chinese auto companies have collectively entered the 2.0 era of export. In the past many years, automobile export was just for exporting automobiles. Now, automobile enterprises not only export automobiles, but also export infrastructure such as logistics, finance, services and even charging piles in the industrial chain to sell automobiles in an "organic and systematic" way.

At the same time, many auto enterprises have also started to really "go global". Different from the past years when they just set up CKD (all parts assembly) factories overseas, now SAIC Motor, Great Wall Motors and other auto enterprises have begun to invest in and build production bases overseas. This long-term investment shows their determination to layout overseas.

There are still many challenges for the export of new energy vehicles to Europe

The export of new energy vehicles is a highlight of China's automobile export this year. According to the data of China Automobile Association, 88000 new energy vehicles were exported in the first half of the year, up 298% year on year, including 82000 new energy passenger vehicles, up 342% year on year.

It should be pointed out that since April this year, the models produced by Tesla in its Shanghai factory have also begun to be exported to Europe and other places. According to the data of the Passenger Car Association, Tesla exported 30700 vehicles from April to June. Excluding this part, the total export volume of other new energy vehicles dominated by Chinese brands in the first half of the year was also more than 50000. Roughly speaking, the export volume in the first half of the year also increased by more than 170% year on year.

SAIC Group, Chery Automobile, Geely Automobile and other automobile enterprises have exported many new energy vehicles. According to the data of SAIC, the sales volume of new energy vehicles in the first half of this year reached 20000, including about 12600 new energy vehicles of MG brand in the UK, Germany, France, Italy, the Netherlands and other developed countries in Europe.

The European market is the main incremental market for China's new energy vehicle exports. Influenced by European countries' carbon emission policies and new energy vehicle subsidy policies, the European new energy vehicle market has seen explosive growth in the past two years. Last year, it also replaced China as the largest new energy vehicle market. In the face of this trend, Chinese car companies have rushed to Europe.

SAIC MG brand officially entered Europe at the end of 2019. In 2020, MG brand and SAIC's commercial vehicle brand Chase sold a total of 25000 new energy vehicles in Europe. According to SAIC Group's plan, by 2025, SAIC will strive to exceed 300000 new energy vehicles, of which 70% - 80% are new energy vehicles.

SAIC MG is a passenger car brand that has earlier laid out its presence in the European market. In addition to SAIC, the reporter learned that BYD, the "top selling company" of new energy vehicles in China, has also started the pace of passenger cars entering Europe. On June 7 this year, BYD shipped the first batch of Tang EVs to Norway, which is the first market for BYD passenger cars to be exported to Europe. It is expected that 1500 Tang EVs will be shipped in the whole year.

In addition, new car making forces such as Weilai and Xiaopeng also announced their plans to enter the European market. Another new car making force, Aichi Auto, has taken the lead in taking the initiative. Last May, the first batch of models were launched. By the beginning of July 2021, Aichi had exported a total of 2578 cars, including 1549 cars in 2021.

As the birthplace of the automobile industry, Europe is a market that foreign brands are difficult to break through. However, the trend of electrification and intelligence in the automobile industry provides an excellent opportunity for Chinese brands to get close to Europe. "We will accelerate the layout in recent years, and we must firmly grasp this first mover advantage," Liu Xinyu, deputy general manager of SAIC Europe, told 21st Century Business Herald.

However, the competition in the European market is also quite fierce. In addition to foreign brands such as Tesla, which are also imported, there are local brands such as Volkswagen, Volvo, Renault, etc. Liu Xinyu said frankly that Europeans are very loyal to brands, which will be one of the challenges for new brands to enter the European market.

For Chinese brands, grasping the market demand and carrying out differentiated competition may be the way to win. Liu Xinyu introduced that currently SAIC Motor mainly promotes the MG ZS in the European market, which is a small car, which can meet the popular demand of the European market. Because Europeans have relatively no habit of saving, ordinary consumers will also tend to buy cars with high cost performance.

He particularly stressed that the price of selling cars in Europe must be kept at a reasonable level, and the local market must not be disturbed. "Many people in the Chinese market like to be price killers. Price killers can quickly occupy the market, but will cause long-term damage. In the automotive field, you can't manage the price well. After three months, the residual value of the car will come down immediately."

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