The dependence of Chinese automakers on foreign markets increased

The China Automobile Manufacturers Association announced on Monday: The country's passenger car exports in September 2026 have increased by 64% compared to the same period last year. The post dependence of Chinese automakers on foreign markets increased appeared first on Safir Arjan.

According to Ambassador Arjan, this growth has occurred in the context that domestic car sales in China have faced a decrease in demand and consumer confidence, and car manufacturers have relied on foreign markets more than before to increase sales and profitability.

According to data from the Association of Automobile Manufacturers, China exported about 919,000 passenger cars in September, with increased foreign demand for electric vehicles and plug-in hybrids being the main drivers of export growth. China's total passenger car exports exceeded 7.1 million vehicles in the first nine months of 2026, which is more than 70% higher than the same period last year.

In contrast, domestic passenger car sales in China's domestic market fell for most of the year as automakers grappled with declining consumer confidence and tighter government subsidies.

According to the China Association of Automobile Manufacturers, the domestic sales of passenger cars in September fell by 27 percent compared to the same period last year and reached more than 1.6 million vehicles.

China is the world's largest exporter of cars, but the rise in exports has raised concerns among its trading partners about weakening domestic auto industries and upsetting the trade balance.

Increasing the presence of Chinese car manufacturers in global markets

In recent months, Chinese automakers have increased their focus on rapidly expanding operations in overseas markets, including Europe, Latin America, Southeast Asia and Africa. In the framework of an agreement to reduce tariffs with China, Canada has made the path of Chinese electric cars easier to enter its market.

Stephen Chan, one of the senior managers of S&P Global Ratings, said: Chinese automakers have increasingly relied on foreign markets to increase sales and profitability to compensate for the weakness of the domestic market.

Elix Partners consulting company and some auto industry analysts predict that the global export of Chinese cars will reach about 10 million cars in 2026.

In Europe, Chinese automakers have created increasing competition for the bloc's automakers by relying on lower production costs and prices. For example, the analysis of AlixPartners shows that the cost of producing a Chinese electric car is about 20,000 dollars, but the cost of producing a similar European model is 31,000 dollars.

Annual ceiling of 350,000 cars for the import of hybrid cars from China to the European Union

The European Union had previously imposed higher tariffs on the import of Chinese all-electric vehicles. In recent weeks, the rapid increase in sales of Chinese hybrid cars in Europe has become one of the main axes of trade negotiations.

EU trade commissioner Maroš Šefčović announced last Friday that China and the EU have reached a temporary agreement to reduce Chinese hybrid car exports to the bloc, which could cut Chinese hybrid car exports to the bloc by half.

Two senior European Union officials announced on Monday that the agreement would set an annual import quota of 350,000 Chinese-made hybrid vehicles, including plug-in hybrid vehicles.

According to one of these officials, who did not want to be named, the customs authorities of the 27 European Union member states may start coordinated monitoring of the import of these cars from December and stop further shipments after the import reaches the set ceiling. This restriction will not include cars manufactured by Chinese companies inside Europe. Analysts believe that protectionist measures and trade restrictions will continue to cloud the export prospects of Chinese automakers.

Production outside China; Car manufacturers' strategy to deal with tariffs

Chinese automakers will likely continue to expand production overseas to reduce their exposure to tariffs and other trade risks, said Ming Hesun Lee, head of the Greater China Automotive and Industry Research Department at Bank of America. "More volume of production will be done locally," he said.

Meanwhile, the United States has practically limited the entry of Chinese electric cars into its market by imposing heavy tariffs. US President Donald Trump's meeting with Chinese leader Xi Jinping during his official visit to Washington last month also did not lead to an agreement on the access of Chinese electric vehicles to the US market.

According to the Associated Press report, experts believe that the continuation of political and commercial uncertainties will probably make the American market a lower priority for Chinese automakers.