China tightens its grip on the world of electric cars through “overseas manufacturing”
الناشر رئيس التحرير: مشعل الخبجي
الناشر رئيس التحرير: مشعل الخبجي
Chinese automakers aim to double their full manufacturing capacity outside China.
This comes as part of a strategy to overcome the obstacle of customs duties imposed on cars made in China and meet the demand for electric vehicles, according to a report from Bloomberg.
The agency reported that Chinese automakers will enhance their annual production capacities in foreign factories from 1.2 million vehicles in 2023 to more than 2.7 million by 2026.
Tons of investments
With the United States, the European Union and Turkey imposing tariffs, Chinese companies have begun pumping tons of investment into mass manufacturing that includes all four major steps in automobile production, from stamping, welding, painting and final assembly, according to the report.
Although it is an expensive step to build, it will enhance production capabilities compared to partial assembly, after the main parts of cars were manufactured in China and then shipped abroad for assembly.
China saturates
The agency's report, reported by the "Electric" website, stated that with the saturation of the electric car market in China, increasing domestic competition and excess capacity are pushing Chinese electric car brands abroad in search of new growth markets.
So far, Chinese automakers have built fully operational manufacturing plants in 9 countries, with an annual production capacity of 1.2 million vehicles as of 2023.
But this will double to 2.7 million units in more than 12 countries by 2026.
BYD, along with Chery, Changan, GAC and the Chinese state-backed SAIC, announced 10 new or expansion projects for its overseas factories, specifically in Thailand, Indonesia and Brazil, from 2023.
Chinese automakers are expanding around the world, with BYD and Geely-owned Volvo leading the expansion in Europe.
BYD is building a factory in Hungary with another announcement for Turkey, giving it access to the European Union. Spain, Italy and Poland are seeking investment, with Geely, Dongfeng and Expend reportedly looking for sites for future factories in Europe.
