Chinese carmakers increasingly rely on overseas markets as September exports surge

HONG KONG (AP) — China's passenger car exports surged 64% in September from the same month in 2025, an industry association reported Monday, as Chinese automakers increasingly focus on exports to drive growth at a time of sluggish domestic sales.

China exported around 919,000 passenger vehicles in September, lifted by overseas demand for plug-in hybrids and pure electric vehicles, data from the China Association of Automobile Manufacturers showed. In the first nine months of 2026, China exported more than passenger cars, up more than 70% compared with the same period last year.

Meanwhile, domestic passenger car sales in China have fallen for most of the year as they face weaker consumer confidence at home and scaled back government subsidies. They declined 27% in September year-on-year to over 1.6 million units, according to the association.

In recent months, Chinese automakers have more aggressively targeted rapid growth in overseas markets such as Europe, Latin America, Southeast Asia and Africa. Canada is also opening its doors to Chinese EV exports under a tariff cut deal with China.

The industry is increasingly relying on overseas markets for sales and profit growth as players seek to offset the weakness in the domestic market, said analyst Stephen Chan with S&P Global Ratings.

Consultancy AlixPartners and some auto analysts have expected Chinese automakers to export nearly or around 10 million vehicles globally in 2026.

In Europe, Chinese automakers are increasingly challenging the European auto industry with cheaper costs and prices. AlixPartners’ analysis found, for example, that a Chinese-branded EV costs around $20,000 to produce, compared with roughly $31,000 for an European equivalent.

The EU has already imposed elevated tariffs on Chinese EVs. Recent discussions among policymakers on Chinese car exports to Europe focused also on the rapidly rising sales of Chinese hybrid vehicles. As pressure on the EU to rebalance trade with China grows, EU trade chief Maroš Šefčovič said Friday that China and the EU reached an interim deal that could cut Chinese hybrid vehicle exports by around half.

Analysts said protectionist measures will likely continue to cloud Chinese automakers’ overseas outlook.

“You can’t expect BYD or the other OEMs (manufacturers) to export too many cars without facing tariffs or pushbacks from the foreign governments,” Xiao Feng, head of the Hong Kong and China Industrials Research at investment group CITIC CLSA, told reporters recently.

Geopolitics is the biggest challenge in its overseas expansion, Stella Li, executive vice president at Chinese EV giant BYD who drives the carmaker’s global growth, acknowledged at an event this month.

As a result, BYD has been expanding its capacity to make cars locally in overseas markets including setting up manufacturing plants in Thailand, Indonesia, Brazil and Hungary, she told the Milken Institute ​Asia Summit in Singapore.

Chinese automakers will likely continue to increase production overseas to help avoid risks such as tariffs, said Ming Lee, head of Greater China automotive and industrial research at BofA Global Research of Bank of America. “More and more volume will be made locally,” he said.

The U.S., meanwhile, has effectively barred Chinese EVs from entering its market with hefty tariffs . U.S. President Donald Trump’s meeting with Chinese leader Xi Jinping during his state visit to Washington in September did not result in a deal on allowing Chinese EV exports to the U.S, and experts say the U.S. market is probably not on top of the agenda of Chinese automakers due to ongoing political uncertainties.