China’s Automakers Pivot to Exports as September Shipments Surge Amid Domestic Slump

HONG KONG (AP) — China’s passenger car exports surged 64% in September compared with the same month in 2025, according to data released Monday by an industry association. The jump highlights how Chinese automakers are leaning on overseas markets to drive growth while domestic sales remain lackluster.

China exported approximately 919,000 passenger vehicles in September, buoyed by international demand for plug-in hybrids and battery-electric vehicles, data from the China Association of Automobile Manufacturers showed. For the first nine months of 2026, passenger car exports rose more than 70% relative to the same period last year.

At the same time, domestic passenger car sales in China have declined for much of the year, hampered by weaker local consumer confidence and scaled-back government subsidies. Sales fell 27% year-on-year in September to just over 1.6 million units.

In recent months, Chinese automakers have pursued rapid expansion in overseas markets such as Europe, Latin America, Southeast Asia, and Africa. Canada is also preparing to accept Chinese EV exports under a deal that reduces tariffs.

Analyst Stephen Chan with S&P Global Ratings said the industry is becoming more reliant on international markets for sales and profit growth as companies seek to offset domestic weakness.

Consultancy AlixPartners and other auto analysts have projected Chinese automakers could export nearly 10 million vehicles globally in 2026.

In Europe, Chinese automakers are challenging local manufacturers with lower cost bases and pricing. AlixPartners’ analysis found that a Chinese-branded EV costs roughly $20,000 to produce, versus approximately $31,000 for a comparable European model.

The EU has already levied high tariffs on Chinese EVs. Recent policy discussions also focused on the sharp rise in Chinese hybrid sales. With pressure mounting on the EU to rebalance trade with China, trade chief Maroš Šefčovič said Friday that an interim deal was reached which could cut Chinese hybrid vehicle exports by around half.

Analysts cautioned that protectionist measures will likely continue to complicate the overseas outlook for Chinese automakers.

“You can’t expect BYD or the other OEMs (manufacturers) to export too many cars without facing tariffs or pushbacks from the foreign governments,” Xiao Feng, head of the Hong Kong and China Industrials Research at investment group CITIC CLSA, told reporters recently.

Stella Li, executive vice president at Chinese EV giant BYD who leads the company’s global growth, acknowledged that geopolitics is the biggest challenge to its overseas expansion during an event this month.

As a result, BYD has been increasing manufacturing capacity in overseas markets, including setting up plants in Thailand, Indonesia, Brazil, and Hungary, she told the Milken Institute Asia Summit in Singapore.

Chinese automakers will likely continue to boost production overseas to avoid risks such as tariffs, said Ming Lee, head of Greater China automotive and industrial research at BofA Global Research. “More and more volume will be made locally,” he said.

Meanwhile, the U.S. has effectively blocked Chinese EVs with hefty tariffs. President Donald Trump’s meeting with Chinese leader Xi Jinping during a September state visit to Washington yielded no deal allowing Chinese EV exports to the U.S., and experts say the American market is likely not a top priority for Chinese automakers due to ongoing political uncertainties.

Source link