(Yicai) July 3 -- The secretary-general of the China Passenger Car Association has identified three main reasons why the country’s car exports have been increasing this year.

“The Chinese new energy vehicle industry chain is complete, with the cost and iteration speed of batteries, motors, and electric control system supporting facilities having reached globally leading levels,” Cui Dongshu told Yicai. “Moreover, the Association of Southeast Asian Nations, the Middle East, and Russia cut their tariff costs with the implementation of free trade agreements between them and China.”

“Finally, Chinese cars boast product differentiation advantages,” Cui noted. “Advanced configurations, such as fast charging and intelligent driving for electric vehicles, are in line with global electrification demand,” he added, explaining that in the global market, a gap has formed due to insufficient supply caused by the transformation of traditional carmakers.

China’s auto export volume rose 54 percent in the first five months of the year from a year earlier, with the related value up 56 percent, according to data from the China Association of Automobile Manufacturers. Of them, NEV exports soared 79 percent in volume, accounting for nearly 72 percent of the total.

“In the first half of the year, China’s auto exports are expected to beat expectations and reach nearly five million units,” Chen Shihua, deputy secretary-general of the CAAM, said at the association’s monthly conference in June.

The main reason for the general improvement in China’s auto exports this year is that domestic NEV products are more competitive than their foreign counterparts, the head of a high-end Chinese NEV brand told Yicai.

The Chinese market is fiercely competitive and lacks new development space, so companies are mostly relying on overseas sales growth to meet targets, a spokesperson for a Zhejiang province-based automaker told Yicai, adding that selling in overseas markets can also bring considerable profits.

However, going global also brings about challenges. Geopolitical and trade barriers are key problems for Chinese carmakers venturing overseas, said Chen Jingjing, secretary-general of the automotive branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products. The European Union’s tariff and non-tariff barriers and investment restrictions are becoming even greater obstacles, she added.

China’s auto exports have exited the purely trade-driven stage and must shift towards localization and systematization, while strictly controlling non-compliant export behaviors, Chen noted.

Editor: Futura Costaglione