China's car exports surge as expectations grow for EV pivot on Iran war energy shock

HONG KONG (AP) — China’s exports of passenger cars accelerated in March, an industry association said Friday, as Chinese automakers stepped up their push to grow overseas markets.

Passenger car exports jumped 82.4% year-on-year last month to around 748,000 vehicles, according to the China Association of Automobile Manufacturers, up from the 586,000 vehicles exported in February.

Exports of new energy passenger vehicles — including battery electric vehicles and plug-in hybrids — surged more than 140% in March from a year ago to 363,000 units. That’s also up 31% from the about 276,000 units of such vehicles exported in February.

The biggest Chinese automakers, including BYD and Geely Auto, have been increasing their efforts in boosting sales abroad, including expanding production facilities outside China. There have also been growing expectations that the global energy shock and higher fuel prices due to the Iran war could prompt more drivers to want to switch to EVs.

Chinese car brands have made inroads over the past months in regions such as Europe, Latin America and Southeast Asia.

“The impact of the Iran conflict hasn’t fully shown up in March data yet, but it can act as a trigger,” said Chris Liu, a Shanghai-based senior analyst at advisory group Omdia.

“In many markets that are structurally well suited for EVs, adoption has been slow simply because consumers lacked urgency," he said. “A sharp rise in fuel prices changes that.”

The Chinese carmakers’ strong overseas push also came at a time when domestic vehicle sales in China have come under pressure from scaled-back government support this year to encourage drivers to switch to new energy vehicles.

Fierce competition in China among car brands and a prolonged property sector slump that has weighed on consumers' desire for big purchases also impacted Chinese automakers.

Domestic passenger car sales fell 19.2% last month from a year earlier to nearly 1.7 million units. It was the fifth consecutive month of year-on-year declines for passenger car sales at home, based on data from the China Association of Automobile Manufacturers.

UBS auto analyst Paul Gong believes that the domestic sales weakness will not be too long lasting and that the surge in overseas sales among Chinese carmakers could help with the weaker demand at home.

“For the overall industry, the overseas market’s sales volume growth is more than enough to offset domestic decline on a full-year basis,” said Gong, head of China autos research at UBS investment bank.

Overseas passenger car sales by units for Chinese automakers might grow by 20% or more this year compared with last year, he predicted.