KATHMANDU : Chinese automakers are rapidly expanding in overseas markets, even as vehicle sales continue to decline in their home market, writes Reuters.
China’s domestic car sales fell 20% year-on-year to 1.47 million units in July, marking the 10th consecutive month of decline. In contrast, vehicle exports surged 88% to 923,000 units during the month.
In the first half of 2026, domestic sales dropped by 2.3 million units, or 20%, compared with the same period last year. The decline is roughly equal to Japan’s total new-car registrations during the period. Meanwhile, China’s vehicle exports increased 71%.
Weak consumer demand, high fuel prices and intense price competition have weighed on the domestic market. Excess production capacity is also pushing Chinese automakers to look for stronger growth overseas.
Major Chinese brands such as BYD, Geely and Chery are expanding rapidly in international markets. BYD, for instance, saw its domestic sales fall 35% in the first seven months, while overseas sales jumped 79%.
Europe has become a key battleground. Chinese automakers increased their share of Europe’s passenger vehicle market from 3% to 16% over the past four years. Japanese brands held around 12% during the first quarter of 2026.
The gap is even wider in EVs. Chinese brands accounted for nearly a quarter of Europe’s EV shipments, compared with just under 5% for Japanese automakers.
Analysts say China’s advantage goes beyond pricing. Strong battery technology, software, electrification, supply chains and faster product development are helping Chinese brands compete globally.
Counterpoint Research expects Chinese brands to exceed 20% of Europe’s overall passenger vehicle market and reach 29% of its EV market by 2030.
