Chinese automakers are aiming to double their full production capacity outside of China, all in hopes of waiving tariffs on Chinese-made cars and meeting demand for EVs, according to a report from Bloomberg.
Bloomberg reports that Chinese automakers will increase annual production capacity at foreign plants from 1.2 million vehicles in 2023 to more than 2.7 million in 2026.
With the US, the European Union, and Turkey expected to impose tariffs, Chinese companies are pouring tons of investment into full-process manufacturing — which includes all four major steps in car manufacturing, from focus, welding, painting, and final assembly, according to the report. Although it is expensive to build, it has the potential for high productivity compared to knock-down assembly, where key car parts are made in China, for example, and then shipped abroad for assembly.
“As the electric vehicle market in China becomes saturated, increasing domestic competition and overcapacity are pushing Chinese EV brands abroad to seek new growth markets,” Bloomberg said in a report.
In total, Chinese automakers have built full-scale production plants in nine countries, with an annual production capacity of 1.2 million vehicles from 2023. But that will double to 2.7 million units in a dozen countries by 2026 “if the company's announcements are all delivered on time,” Bloomberg reported.
BYD and Chery, Changan, Chinese government-backed GAC, and SAIC have announced 10 new or expansion projects at their overseas plants, namely Thailand, Indonesia, and Brazil, from 2023 to the end of – August. Of course, Chinese automakers are expanding globally, with BYD and Geely-owned Volvo driving expansion in Europe. BYD is building a factory in Hungary with another announcement by Turkey, which gives access to the EU. Spain, Italy, and Poland are pursuing investments, while Geely, Dongfeng, and Xpend are reportedly looking for future plant locations in Europe.
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