The evolution of the Chinese car market

Currently the entire automotive sector is going through an unprecedented transformation. As the ecological transition and increasingly stringent regulations on CO2 emissions are a guarantee for a more sustainable development of the global economy, countries around the world are committed to achieving carbon neutrality. In the midst of all these changes, new forms of energy, as well as intelligent and increasingly connected vehicles have brought new stimuli to the economic growth of the Chinese market, as well as opportunities and challenges for all businesses and individuals operating in the automotive aftermarket sector.
China, the world’s most dynamic market
With the rapid development of China's economy and consumption growth, China's automotive industry has made great strides, and its expansion has become consistent. For 14 consecutive years, from 2009 to 2022, China ranked first in the world in terms of automobile production and sales volume and is now the world's largest automobile sales market and a major automobile producing country. The Chinese automotive industry’s growth though, isn’t limited to market size only, but also technological progress and competitiveness. Data from the China association of automobile manufacturers (CAAM) shows that from January to July 2023, automobile production and sales in China were 15.65 million and 15.626 million units, respectively, a year-on-year increase of 7.4 % and 7.9%. According to CAAM forecasts, total car sales in China are expected to increase by 3% compared to the previous year, reaching 27.6 million units in 2023. Passenger car sales are expected to grow by 1%, reaching 23, 8 million while sales of commercial vehicles are expected to increase by 15%, reaching 3.8 million; concerning new energy vehicles, growth should be around 30%, reaching 9 million. Furthermore, China is expected to export 4 million vehicles in 2023, making it the world's largest vehicle exporter. According to Xia Wendi, president of the China national machinery industry international Co. (Sinomachint - an exhibition services platform for Chinese state-owned enterprises), “following the abolition of Covid-19 restrictions, Chinese local governments introduced policies to encourage consumption, which have stimulated the demand for new cars, with a consequent increase in the number of vehicles in circulation. This has led to the continued growth of the automotive industry, making it one of China's industrial pillars. The industry has a long, very extensive supply chain and its upstream and downstream activities can extend to many aspects of the real economy. Therefore, it plays an important and valuable role in optimizing the transport structure by providing significant job opportunities, promoting social progress and driving the economic growth of the country."
Energy transition and sustainable development are now industrial trends
With the progressive spread of increasingly electrified, connected, autonomous and shared vehicles, the automotive industry is experiencing the most radical change in the last hundred years. “Chinese carbon peaking and carbon neutrality goals require a fundamental change in vehicle energy and the promotion of plug-in hybrid electric vehicles has become the only path of development for the automotive industry – says Xia -. At the same time, the increasingly stringent limitations imposed by the EU on combustion engines has meant that the European automotive market has accelerated the transformation towards electric vehicles. Chinese companies detected huge market opportunities and quickly gained a dominant position in the European market. At the recent Iaa Mobility 2023 in Munich, Germany, 41% of all exhibitors were based in Asia and the number of Chinese companies more than doubled. From battery manufacturers to car manufacturers, these Chinese companies operate in every sector of the industrial chain. Due to the global consensus on changing the automotive industry, vehicle energy transition has been placed at the top of the agenda. In a context of stringent emission regulations and limitations imposed on combustion engine vehicles, electrification is becoming the most important trend and the main direction of development.” Cars, as an important part of modern transportation, are becoming more electric, more connected, more autonomous and shared than ever before. Following growing environmental awareness and the development of new technologies, electric vehicles are becoming the mainstream of the future. At the same time, the development of autonomous vehicles could not only create room for increasingly customized vehicles for consumers, but also connect more industrial chains, bringing revolutionary changes to the manufacturing industry.

“Therefore, all things considered, we are confident about the future of the Chinese automotive market,” continued Xia. The development of intelligent and new energy connected vehicles, the emergence of new technologies and products, as well as new business models are profoundly changing the ecosystem of the automotive industry and reshaping the competition landscape. The major players in the Chinese automotive industry need to have a correct view of what is happening, broaden their horizons and actively seek market opportunities. We are convinced that in this new era, in which our industry is experiencing radical changes, many different opportunities will arise."
Being active in the global economy depends on international cooperation: the role of trade fairs
Since removing the restrictions imposed by Covid-19, China has provided strong support to the recovery of the global economy making great efforts in stabilizing the domestic economy and promoting international economic cooperation. “As the largest exhibition service platform for Chinese state-owned enterprises and organizers of numerous exhibitions at home as well as abroad, Sinomachint, in line with the country's economic performance, is actively participating in the transformation of the automotive industry and is committed to serving both Chinese and foreign aftermarket companies – underlined Xia -. The professional exhibitions organized by Sinomachint have attracted well-known automobile manufacturers, suppliers, buyers and automotive market players from all over the world, providing opportunities for exchange and cooperation between enterprises upstream and downstream in the automotive industry supply chain, and promoting a collaborative spirit in the industry and serving as platforms for efficient communication between supply and demand, helping the automotive industry and related sectors to work together for a win-win future. This is our “founding mission”, it has never changed and will remain so for a long time to come. As a major player in China's automotive scene, Sinomachint must take responsibility for achieving both national goals and the industry's mission. We will keep pace with industry trends, ride the wave of change, and promote international cooperation and exchanges, so as to inject new vitality into the recovery of the automotive industry and sectoral trade shows in China and the whole world in the “post-pandemic era".