Automotive manufacturing industry in China - statistics & facts

In the first decades of the PRC, China’s automobile production set off with an emphasis on commercial vehicles for industry and military purposes. The automobile industry in China did not gain momentum until the beginning of the 1990s. The rapid growth of the domestic market has also further accelerated the automobile industry in China. Newly registered passenger vehicles amounted to about 19.7 million units in 2021, which was the third consecutive year of decline since the peak in 2017. In line with this development is vehicle sales, where the increasing trend has unfortunately begun to reverse since 2018, with the COVID-19 pandemic accelerating its decline. Only in 2021 did the growth rate start to pick up slightly to 3.8 percent.

Domestic brands increased market share

China’s automobile market has attracted many well-established foreign brands to invest in automobile production in China. However, most foreign brands were only allowed to produce their vehicles in China by establishing joint ventures with domestic automobile manufacturers, which the government has recently announced plans to loosen gradually. Due to technical development and lower production costs, several indigenous brands of China’s leading automobile manufacturers have also gained more and more popularity in the automobile market. Most vehicles manufactured in China are sold within the country, while manufactured vehicles for exports only contributed approximately 7.7 percent to China’s overall auto production volume in 2021.

Promoting new energy vehicle productions

In order to promote new energy vehicle (NEV) sales, China has introduced various measures, such as tax exemptions, subsidies for car purchases and a requirement for government departments to buy more new energy cars, as a way to save energy and reduce air pollution. NEV manufacturers also received financial support from the government to reduce their R&D and production costs. China’s production of NEVs grew from about 17,500 units in 2013 to over 3.5 million units in 2021. The growth and emphasis on NEVs in China is not only a measure to reduce urban air pollution, but can also be seen as a way for Chinese automakers to become globally competitive against traditional manufacturers specializing in vehicles with internal combustion engines.

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