(Yicai) Jan. 6 -- China's auto sector has secured a pole position in innovation by leveraging its early-mover advantage in electrification amid the global industry's deep transformation towards green, low-carbon, and intelligent connectivity, but to maintain its strong competitive foothold and leadership worldwide, it must strengthen supply chain resilience, overcome trade barriers, and build a new global development ecosystem led by technology, supported by production capacity, and empowered by services.

China's new energy vehicle exports surged 90 percent to just over 2 million units in the first 10 months of last year from a year earlier, according to official figures. In addition, its auto industry is transitioning from a single product export model to a new stage of comprehensive globalization involving tech, capital, and production capacity, but its globalization still faces multiple challenges.

In Europe, trade protectionism is on the rise while green barriers are mounting. The European Union's trade protection measures have evolved to comprehensive institutional barriers from unilateral tariffs, imposing additional tariff pressure through anti-dumping investigations.

In the United States, supply chain decoupling risks have sharply increased due to geopolitical dynamics. Regional market barriers have also increased, directly weakening the price competitiveness of Chinese products, while the lack of customized development tailored to US customers has constrained further market breakthroughs.

In Southeast Asia, lagging local service ecosystems hinder Chinese brands from breaking through higher tiers. In the Middle East and Africa, extreme environments and insufficient infrastructure pose dual challenges.

In response, China's auto industry should first accelerate the establishment of internationally aligned life-cycle compliance records and carbon footprint databases, promoting the development of standard accounting systems compatible with the EU's Carbon Border Adjustment Mechanism.

It is recommended that the Chinese government take the lead in collaborating with relevant stakeholders to deepen standard co-development, actively converting China's accumulated experience into international rule proposals, reducing firms' overseas adaptation costs, while strengthening security protection and enhancing verification in information security and functional safety. These measures will secure more institutional discourse power and technical mutual recognition space for Chinese intelligent electric vehicles' globalization, addressing technical and trade barriers.

Global capacity layout and supply chain reorganization must be optimized. In high-barrier markets like Europe, establish "transit + assembly" bases relying on regional strategic hubs, promoting Semi Knocked Down/Completely Knocked Down models.

In neighboring markets like Southeast Asia, China should develop tightly coordinated regional supply chain clusters, reducing manufacturing costs through industrial agglomeration. In markets like the Americas, it should adopt a "local production, regional radiation" penetration strategy, building safe and efficient regional supply chain systems.

Chinese carmakers should abandon the crude "one-time sale" model and instead establish differentiated guarantee systems for different regions, build a three-dimensional ecosystem integrating "service, finance, and infrastructure," and solidify localized development foundations based on local conditions.

China should leverage its advantages in intelligent cockpits and new energy technologies to conduct customized research and development for different regional characteristics, implementing differentiated product strategies of "one country, one policy" to precisely target niche markets.

(The author of this article is a researcher at Tongji University's German Research Center.)

Editor: Martin Kadiev