In a significant industry development, China has officially taken the crown as the world's largest vehicle exporter in 2023, surpassing Japan, according to data released by the Japan Automobile Manufacturers Association (JAMA).
The remarkable growth of China's auto sector in recent years can be attributed to substantial investments in electric vehicles (EVs), a domain where Japanese companies have exercised more caution.
JAMA's figures revealed that Japan shipped 4.42 million vehicles in 2023, while China exported 4.91 million, as reported by the China Association of Automobile Manufacturers. China's customs bureau even placed the number higher at 5.22 million, signifying a remarkable year-on-year increase of 57%, with a notable one-third of these vehicles being fully electric.
This data not only confirms that China had been exporting more vehicles on a monthly basis but also establishes its dominance over Japan for the entire year.
Unlike their Chinese counterparts, Japanese automakers, including the world's largest company by unit sales, Toyota, produce significant volumes of vehicles in various other countries. In 2022, Japan's domestic vehicle production, excluding motorcycles, amounted to 7.84 million units, while overseas production reached nearly 17 million units.
While Japanese manufacturers have long focused on hybrid vehicles, which combine battery power and internal combustion engines and includes groundbreaking models like the Toyota Prius, the shift toward fully electric models has been more gradual. In 2022, just 1.7% of cars sold in Japan were electric, in contrast to approximately 15% in Western Europe, 5.3% in the United States, and nearly one in five in China.
However, Japanese automakers are committed to intensifying their electric vehicle efforts. Toyota, for instance, aims to sell 1.5 million EVs annually by 2026 and 3.5 million by 2030. The company has made substantial investments in battery technology and is placing strong bets on mass-producing solid-state batteries, a technology that promises faster charging and extended range for electric vehicles.
Notably, Chinese company BYD recently overtook Tesla as the leader in all-electric vehicle sales, capitalizing on robust government support for the EV sector in China. However, China's success in electric vehicles has led to regulatory scrutiny in Western markets, with allegations of anti-competitive practices such as price-dumping.
The European Commission, for instance, has initiated an investigation into Chinese state subsidies for electric cars, which could result in the imposition of duties on vehicles believed to be unfairly priced lower, undercutting European competitors.
Christopher Richter, an auto analyst at CLSA, drew parallels to Japan's automotive export surge in the 1980s, emphasizing how Japan addressed the situation by expanding its overseas manufacturing presence. Richter noted that Japanese automakers established four times more factories overseas compared to what they exported.
This shift in the global automotive landscape underscores the growing significance of China's automotive industry and its impact on international trade dynamics.
