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Chinese carmakers go local to grow globally

From overseas-based production to reviving factories, companies take new approaches

By LI FUSHENG | CHINA DAILY | Updated: 2026-03-17 07:21
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Employees work at the BYD electric bus and truck plant in Komarom, Hungary, in June 2025. XINHUA

Complex environment

Electrification has reshaped the competitive landscape, offering Chinese brands — strong in batteries, software and cost control — a rare opportunity to enter mature markets at scale.

Statistics from the CAAM showed that China started its bulk exports in 2001, when it shipped 26,000 vehicles overseas after the country's entry into the WTO. The amount was negligible compared with top exporters such as Germany and Japan.

The figure grew gradually to hit 1 million units in 2012 but plateaued around that level until 2021, when its NEV exports helped drive the volume to 2 million units.

The meteoric rise since then has captured the world's attention. While some importers praise the vehicles' cutting-edge tech and stylish designs, others are more concerned about how to protect their own automotive industry.

A telling example is the EU's imposition in late 2024 of duties ranging from 7.8 percent to 35.3 percent on battery electric vehicles imported from China, even those made by European carmakers including Volkswagen and BMW.

Its position did not soften until early 2026 when the European Commission issued a guidance document allowing carmakers to submit price undertakings, including "the minimum import price, sales channels, cross-compensation, and future investments in the EU".

Following the United States, Canada slapped a 100 percent surtax on China's vehicles in 2024.

It did not start thinking about scrapping the plan until Prime Minister Mark Carney's visit to Beijing in January, although most of China's EV exports to Canada had been from Tesla's Shanghai plant.

"Complete-vehicle trade now faces a much more complex environment," said Zhang. "In the new stage of development, many automakers and parts suppliers are choosing to localize production overseas, gradually shifting vehicle manufacturing and supply chains abroad — a model that is welcomed by many host countries," he said.

That shift is now visible in both corporate plans and concrete investments.

By 2026, Chinese automakers are expected to have overseas production capacity of around 3 million vehicles, with actual annual output exceeding 2 million units, according to industry estimates.

China's earlier attempts at overseas expansion were often experimental and fragmented — focused on exports and semi or complete knockdown assembly.

The latest wave, by contrast, is broader, deeper and far more systematic. Rather than asking how many cars can be sold abroad, companies are asking how to embed themselves into local industrial systems.

This means building factories, reviving idle plants where possible, localizing supply chains, conducting R&D close to end-users and establishing long-term service ecosystems.

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