Bloomberg: Chinese-made cars will account for nearly 10% of South Africa's total auto sales in 2024

Bloomberg News reported that Trump wants to shut out Chinese automakers from entering the US market, but this will not prevent these companies from occupying markets in other parts of the world. In fact, they are already doing so.

From Bangkok to Johannesburg to Sao Paulo, streets are increasingly crowded with affordable compact cars, crossovers and SUVs made by companies such as Great Wall, BYD, Chery and SAIC.

While the Trump administration is expected to protect America’s Big Three automakers from Chinese rivals at home, and Canada and the European Union have imposed tariffs on Chinese-made electric vehicles, buyers in emerging markets are welcoming Chinese cars and trucks with open arms.

In South Africa, Chinese-made cars account for nearly 10% of total car sales, which is about five times the sales in 2019. In Turkey, Chinese brands account for 8% of the car market share in the first six months of 2024, compared with almost zero in 2022. In Chile, Chinese brands have accounted for nearly a third of total car sales for several consecutive years.

China exports more vehicles than any other country, with passenger car exports surging nearly 20% to 4.9 million in 2024 alone, from less than 1 million in 2020, according to the China Association of Automobile Manufacturers.

“Chinese automakers have penetrated many global markets with high-quality, competitively priced vehicles,” said Abby Chun Tu, an auto research analyst at S&P Global Platts in Shanghai. “It’s the same strategy that has been successful for Korean and Japanese brands, but Chinese automakers also have the advantage of advanced software and rich configurations, even on mass-market models.”

Many less-developed markets don’t have enough charging stations or reliable electricity grids to support all-electric models, but Chinese automakers have found a ready market for gasoline-powered cars that they can no longer sell in large numbers at home.

According to Oliver Wyman, Chinese automakers’ global market share in overseas markets is expected to climb from 3% today to 13% in 2030. If China’s domestic market is included, this global market share jumps to 33%, while in Africa and the Middle East, it is expected to reach 39% by 2030.

At a conference in February hosted by investment firm Wolfe Research, the heads of Ford and General Motors acknowledged the competitive pressures they face in developing markets.

“We have a very solid business overseas, but Chinese companies are now entering those markets and globalizing the supply chain,” Ford Chief Executive Jim Farley told investors. “In emerging markets like India and particularly in South America, Chinese companies are dominant.” He specifically mentioned Chinese-made electric vehicles.

Ford has stopped car production in Brazil, where its former plant was bought by China's BYD, but it has drawn lines around its operations in South Africa and Thailand, which were capable of producing hundreds of thousands of Ford Ranger pickup trucks a year.

GM also sees Chinese companies as formidable rivals. But CEO Mary Barra is choosing carefully where to go against them. At the same time, the Detroit-based automaker is well-placed to seize opportunities to export models made by its joint ventures in China to emerging markets such as Brazil. Barra said partnering with Chinese automakers on some products would allow GM to be more competitive in markets where "Chinese companies have a large presence."

Stellaris Automotive, which owns the Chrysler and Dodge Ram brands, is also working with a Chinese partner in Europe and plans to bring its models to the Middle East and South America.

Asia's big automakers are also being chased by China's upstarts. Toyota Motor Corp. has a 17.4% market share in the Middle East and Africa, but is being chased by Chery and Geely, which have 5.3% and 2%, respectively, according to GfK Automotive. Toyota is feeling similar pressure in Southeast Asia, where it controls 35.7% of the market, while Geely and SAIC Motors hold 5.1% and 1.4%, respectively.

Similar to the situation in Brazil, China has expanded its influence in Thailand's auto market using policies designed to encourage electric vehicle sales. In Thailand, Chinese brands' market share has grown to 13.3% by the last quarter of 2024, up from 5.5% two years earlier, according to S&P Global Mobility data. Even more telling: During the same period, Chinese brands' share of Thailand's electric vehicle market has grown rapidly from 22% in 2022 to 71%.

Thailand cut import taxes on electric vehicles, increased subsidies for buyers and gave big tax breaks for car factory investments. As a result, electric vehicle sales surged more than 600% in 2023 from the year before to 73,568 units, accounting for nearly 9.5% of total passenger car sales, according to the Federation of Thai Industries. Electric vehicle sales fell slightly last year to 66,732 units, but their share of total car sales rose to just under 12%.

On the first day of the 11-day Bangkok International Motor Expo in late November, Toyota, Ford and Honda shared showroom space with BYD, Great Wall Motors, SAIC Motor's MG and Geely Automobile, which was making its Thai debut. Businessman Wiyavit Petra, 57, said BYD's global reputation, local production layout and low prices convinced him to try something different.

At the auto show, he looked at a BYD Haibao 6 SUV and said: "I have driven Toyota and Honda cars all my life, but now I want to open my mind and try something new. And it is affordable, so it is worth a try."

Self-cut wood network