08/09/2023
China Is Flooding the World With Cars
Even as China’s other exports falter, its carmakers are seeing big increases in overseas sales, mainly for gasoline-powered models.
At a time when many of China’s exports are faltering and its consumers are spending less at home, the country is flooding the world with cars.
Overseas demand for inexpensive vehicles made in China, mostly gasoline-powered models that Chinese consumers now shun in favor of electric cars, is so great that the biggest obstacle to selling more abroad is a lack of specialized ships to carry them.
Chinese automakers have leaped to dominance in Russia since war began in Ukraine, transporting cars by train. The companies have also captured large shares of markets in Southeast Asia, Australia, South America and Mexico. With lingering Trump-era tariffs holding back sales to the United States, China’s automakers are preparing a big push into Europe — once they have enough ships.
Shipyards along the Yangtze River are building a fleet of car-carrying ships that act as giant floating parking lots, capable of carrying 5,000 or more cars at a time.
Overall exports of Chinese goods, everything from furniture to consumer electronics, slumped 5.5 percent in the first eight months of this year, according to data released on Thursday. But China’s car industry has quadrupled exports in just three years, surpassing Japan this year as the world leader. This year, exports of cars surged 86 percent through July.
Chinese households’ appetite for spending — on new cars and almost everything else — has waned as real estate prices have fallen. Consumer confidence has shown few signs of recovering even after the lifting of nearly three years of stringent “zero Covid” policies.
When Chinese households buy cars, they increasingly choose electric vehicles from local manufacturers, which lead global production of EVs. The result is an immense supply of gasoline-powered models that Chinese consumers no longer want but that still sell abroad.
Chinese carmakers are stuck with unused factory capacity to build about 15 million gasoline-powered cars a year. They have responded by sending more than four million cars this year to foreign markets, at bargain prices.
