Ausländische Investitionen überschreiten erstmals die inländischen, und die chinesische Automobilindustrie geht auf den Weg zu einem neuen Auslandsausstoßszenario.
Recently, a report by the US consulting firm Rhodium Group, published this week, shows that Chinese companies in the electric mobility supply chain invested approximately $16 billion (about 114.79 billion yuan) overseas last year, more than the $15 billion (about 107.62 billion yuan) invested domestically. This is the first time since records began in 2014 that the overseas investments of Chinese electric mobility companies have exceeded domestic investments.
Another report by the group shows that the automotive industry was the second - most active sector for Chinese overseas investments in the second quarter of this year, with a total of 29 significant investments worth $6.8 billion (about 48.79 billion yuan) in total, only behind the materials and metals industry.
Overseas investments become an inevitable trend
In this regard, Xia Qing, a global strategic partner of Time - Moving (Beijing) International Consulting Co., Ltd., which focuses on corporate strategic investments (hereinafter referred to as Time - Moving), agreed with this trend in an interview with Observer.com and attributed the reasons to four aspects:
At the macro - economic level, overcapacity and intensified domestic price competition drive external demand as a new growth potential. China has been the world's largest automobile exporter for two years. The strategy of Chinese automakers to "produce locally and supply the local market" better meets the needs of foreign markets.
Economic calculation of domestic and overseas sales of Chery Tiggo 8 Research Institute of Guojin Securities
At the industrial development level, most small and medium - sized domestic automakers and suppliers face challenges such as customers switching to other products, a decrease in orders, and poor corporate profitability. In particular, small and medium - sized suppliers lack close partnerships with automakers and the ability to explore international markets. They are urgently seeking new overseas opportunities to ensure the survival of their companies.
At the geopolitical and compliance level, the US and Europe have imposed taxes on Chinese electric vehicles and related supply parts since last year, forcing automakers and the supply chain to "localize" overseas.
At the foreign market level, some regions and markets are facing the challenge of transforming and modernizing the automotive industry. They need new technologies and new capital to jointly develop the local automotive industry and market. Some markets also want to strengthen the production and manufacturing capabilities of their automotive industry. New energy sources and technologies help improve the local automotive industry. These foreign demands will be opportunities for Chinese automakers and suppliers to leverage their technological and supply - chain advantages to enter the corresponding markets and create value.
Main overseas layouts of Chinese electric vehicle manufacturers Colliers International
In contrast to the previous model where automakers mainly dominated the Chinese automotive industry, Xia Qing explained that the current form of overseas engagement is evolving towards greater participation of the supply chain, with automakers and leading suppliers going overseas together. This approach is similar to the global expansion of German, Japanese, and South Korean automakers in previous years.
Already announced production investments of the Chinese zero - emission automotive supply chain (light color for overseas investments, dark color for domestic investments) Rhodium Group Report
The Rhodium Group also pointed out in its analysis report that Chinese overseas investments in the electric mobility supply chain are mainly concentrated in the battery sector, with the proportion of overseas investments in total investments reaching up to 74%. The report states: "This is the first time that the overseas investments of Chinese zero - emission automotive companies have gained dominance. It is a historical turning point. Previously, about 80% of the investments were concentrated in the domestic market."
However, Time - Moving also mentioned that compared with large automakers and established suppliers, small and medium - sized automakers and suppliers lack the ability and opportunities to invest directly overseas. They are more likely to take the opportunity to conduct overseas explorations to understand the local market, establish market contacts, and build partnerships to find new markets and new customers.
Cooling in North America, warming in Europe, Asia, and Latin America
In terms of the market, Time - Moving believes that the direction of overseas explorations by Chinese automotive companies conforms to the general trend of overseas engagement, but the overseas investments of the Chinese automotive industry and the overseas sales targets of automakers do not always match. The Rhodium report also pointed out that Chinese companies pursue different strategies for foreign direct investment (FDI) depending on their market segmentation.
Excerpt from an industry report by Northeast Securities
According to an industry report by Northeast Securities, Mexico was China's most important export market in the first quarter of this year. However, from an investment perspective, there is a cooling trend in the Chinese automotive industry's investment in North America.
Since Trump took office at the beginning of this year, the tariffs imposed by the US on Mexico and the trade conflicts with China have directly affected the goals of Chinese automakers and suppliers to enter the US market through Mexico. In terms of investment enthusiasm, the establishment of factories by Chinese automakers in Mexico gradually declined during Biden's tenure from 2023 to 2024.
Meanwhile, the increase in Chinese electric vehicle exports to countries such as Brazil, Belgium, the UK, Saudi Arabia, Australia, and the Philippines shows the investment potential of these regions.
Main overseas capacity layouts of Chinese electric vehicle suppliers Colliers International
Time - Moving explained that Europe, as the world's third - largest automotive market, should still be a central strategic market for the Chinese automotive industry. Especially in Italy, France, Germany, and other leading automotive - producing countries that are in a transition phase, industrial transformation requires new technologies, new equipment, skilled labor, and capital, which will be beneficial for Chinese overseas investments in the automotive industry.
According to a press release on the official website of the Investment Promotion Agency Hungary (HIPA), Chinese direct investments in Europe totaled 10 billion euros (about 83.5 billion yuan) in 2024, representing a 47% increase compared to the previous year and the first annual growth since 2016. Chinese investments in Hungary are mainly concentrated in the automotive sector, especially electric vehicle manufacturing, accounting for 62% of Chinese electric - mobility - related investments in Europe.
The Central Asian market, led by Uzbekistan, with stable GDP growth, a young workforce, and stable geopolitics, is also actively promoting the development of the new energy and automotive industries. These regions will also be an opportunity for the Chinese automotive industry to participate in ecological development.
In addition, South America, especially Brazil and Argentina, remains an important market for leading Chinese automotive companies. Most leading automakers have already built their capacities in the region, and the long - term development of the supply chain offers great opportunities for Chinese suppliers to gain a foothold in these markets.
In the Southeast Asian market, the Chinese automotive industry has used the model of joint engagement by automakers and the supply chain to break the decades - long dominance of the Japanese automotive industry in the region. According to statistics, in recent years, not only automakers such as Great Wall, Changan, BYD, and XPeng have built factories in the region, but the number of Chinese automotive suppliers in Thailand has increased to 165 by March this year, a 3.4 - fold increase compared to 2017.
Risk and compliance remain key points in overseas investments
Considering the rapid growth of overseas investments and its experience in overseas investment investigations, Time - Moving explained to Observer.com that the Chinese automotive industry should first identify the value - creation opportunities (Value Creation) and clarify the value proposition (Value Proposition) of Chinese automotive companies in the local market before engaging in overseas business. "How Chinese automotive companies position the value of their products, services, and brands, how they better understand the needs of the local market, and balance the interests of stakeholders (government, competitors, trade unions, supply chain, etc.) to maximize their own value in foreign markets."
Secondly, companies must investigate the local market demand, industry problems and opportunities, and think about how to implement their strategies and convert these opportunities into corporate revenue.
After setting the first - stage strategic goals, both the Rhodium Group and Time - Moving mentioned the common risks and points to note in overseas investments: Higher regulatory and political risks.
The Rhodium Group mentioned in its report: "Domestic Chinese battery factories can usually start operating within 3 to 12 months, while it takes 10 to 24 months for overseas factories. In some cases, the preparation process before construction even takes more than two years." This also increases the investment costs of Chinese companies overseas. The report states that currently, only 25% of the announced electric vehicle production projects of the Chinese automotive industry overseas have been completed, while the completion rate in the domestic market is up to 45%.
Official website of SVOLT Energy Technology Co., Ltd.
Due to the uncertainty arising from trade policies, BYD abandoned its plan to build a large factory in Mexico last month, and SVOLT Energy Technology Co., Ltd., a subsidiary of Great Wall Motors, cancelled 99% of its announced overseas investments last year.
Time - Moving explained that companies must consider the risks of operational compatibility, the maturity of the supply chain, tariffs, laws, labor costs, and ESG factors overseas. It is necessary for professional consulting companies to conduct due diligence and evaluations to convert the visible business opportunities in foreign markets into corporate revenue.
The company, for example, mentioned that to counter local political risks, it is necessary to assist customers in scenario - building. For example, tracking the EU tariff cycle (5 years), expanding the scope of application of the FSR (Foreign Subsidies Regulation), and changes in US tariffs and the Inflation Reduction Act to quantify profitability in different scenarios. Regarding compliance issues, a battery passport and a carbon footprint system will be introduced to support companies with IT and supply - chain data already in the project planning phase, rather than making retroactive adjustments after the production phase.
This article is from the WeChat account ...