Chinese automakers are intensifying efforts to expand their manufacturing capabilities outside of China, with plans to more than double their full-process production capacity in response to rising import tariffs on vehicles from China and increasing global demand for electric vehicles (EVs), according to a report from Bloomberg.
The report indicates that these manufacturers are set to increase their annual production capacity in foreign plants from 1.2 million vehicles in 2023 to over 2.7 million by 2026. This ambitious expansion aims to establish full-process manufacturing facilities, which encompass all key stages of vehicle production, including stamping, welding, painting, and final assembly. Although this method requires significant investment, it offers higher production capacities compared to knock-down assembly, which involves shipping major components from China for assembly in other countries.
“As the electric vehicle market in China saturates, increasing domestic competition and overcapacity are pushing Chinese EV brands abroad in search of new growth markets,” Bloomberg reported.
Currently, Chinese automakers have developed full-process manufacturing plants in nine countries, yielding an annual production capacity of 1.2 million vehicles. This figure is projected to rise to 2.7 million units across more than a dozen countries by 2026, contingent upon timely execution of company announcements.
Leading companies in this initiative, such as BYD, along with state-backed firms like Chery, Changan, GAC, and SAIC, have announced ten new or expanded projects for their overseas plants in regions including Thailand, Indonesia, and Brazil from 2023 to August.
Additionally, these manufacturers are actively pursuing opportunities in Europe, with BYD and Geely-owned Volvo spearheading the expansion. Notably, BYD is establishing a plant in Hungary and has plans for another in Turkey, enhancing its access to the EU market.
Spain, Italy, and Poland are also attracting investment interest, with Geely, Dongfeng, and Xpeng reportedly exploring potential sites for future manufacturing plants in Europe.
