This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 7/14/2017

Overview
The Government of China views its automotive industry, including the auto parts sector, as one of the country’s pillar industries.  China continues to be the world’s largest vehicle market with sales of over 28 million units in 2016, a year-on-year growth of 9% from 2015.  The Chinese Central Government expects that China’s automobile output will reach 30 million units by 2020 and 35 million by 2025.

 

2014

2015

2016

Total Units Local Production of completed cars

23,491,900

24,597,600

28,028,000

Total Units New Energy Vehicle Production

74,763

340,471

517,000

Total Unit Exports of completed cars

950,000

755,500

708,000

Total Unit Imports of completed cars

1,430,000

1,101,900

1,041,000

Total Unit Imports from the US, completed cars

291,690

307,425

235,760

Total Unit Market Size

22,833,590

24,944,000

28,361,000

(Total market size = (total local production + imports) – exports)
Sources:  Global Trade Atlas, MIIT, China Association of Automobile Manufacturers

Made in China 2025 is an initiative to upgrade the country’s industry from low cost mass production to higher value-added advanced manufacturing.  It prioritizes 10 sectors, including the auto sector (and NEVs). The initiative’s objectives are to sell one million units of domestically produced pure electric and plug-in hybrid cars in China by 2020, which should account for a minimum of 70% of the country’s market share. Moreover, it aims to sell three million domestic brand units by 2025, and account for a minimum of 80% of the country’s market share.

The NEV market in China is dominated by domestic brands including BAIC, BYD, and JAC.  A draft measure has been released for public comment that aims to set NEV production targets for both domestic and foreign automakers operating in the Chinese market.  Automakers that do not meet this target would need to purchase NEV credits from other automakers that exceeded it.

China’s “Automobile Mid and Long Term Development Plan”, which was released in April 2017, aims to make China a “strong” auto power within ten years.  It sees the development NEVs and connected cars  as providing an opportunity for China to capture the market pre-emptively and leapfrog in auto development. A number of ambitious targets are also set, relating to the creation of national champions in auto parts and auto brands, connected car technology, driver assistance, and partial/conditional automatic systems driverless vehicles.  Additional guidelines further focus on the sub-sectors of NEV engines, plug-in hybrid engines, fuel cell systems and key components, charging pillars, battery manufacturing facilities, and testing equipment.

Subsidies, from both the central and provincial/municipal governments, have played a significant role in spurring domestic NEV sales and are provided directly to the consumers at time of purchase. Though these subsidies’ stated aim is to support the development of the domestic NEV industry, it also has the effect of preventing cost competitive market entry for foreign producers.  The Ministry of Industry and Information Technology (MIIT) releases “white lists” of qualified vehicles that are eligible for subsidies, nearly all of which are produced by domestic manufacturers. MIIT announced in December 2016 that it would cut the maximum subsidies by 20 percent for 2017 and eventually phase out all subsidies by 2020.
The “Plan of Promoting Vehicle Power Battery Industry Development”, which was jointly released by a number of ministries in March 2017, encourages the development and industrialization of the lithium-ion battery industry, the establishment of R&D centers, and additional support to develop the entire supply chain. It also encourages foreign enterprises to establish R&D centers in China.  Relevant authorities also maintain a list of approved domestically produced NEV battery suppliers. Though not explicitly instructed to do so, Chinese NEV producers only source their batteries from companies on this list; this effectively locks foreign producers out of the Chinese NEV battery market.

Effective December 1, 2016, all imported passenger cars and medium and small size of commercial vehicles valued 1.3 million RMB excluding VAT (approximately $188,000 USD) and above are required to pay an additional 10% “Luxury Car Consumption Tax”.

Leading sub-sectors
Specialty auto parts
China’s specialty auto parts market was valued 150 billion RMB in 2016 with 30% growth every year. The car modification business remains popular in some developed cities despite the fact that China’s “Road Safety Law” essentially prohibits modifications.  Nonetheless, foreign tuning companies have seen the market potential.  The ITA is working to inform Chinese industry and government representatives how the U.S. regulates its aftermarket, including specialty equipment. The Specialty Equipment Market Association (SEMA) has a Market Development Cooperator Program (MDCP) award with ITA to help U.S. specialty parts companies increase their exports to China. Each fall, SEMA organizes an event in China where U.S. specialty parts companies can explore the market and meet potential buyers. Department of Commerce 2016 Top Markets Report on Automotive Parts for China may be found on their website.

Recreational Vehicles
China’s RV market has undergone significant changes over the past several years, including a national focus on the development of tourism, campgrounds and the RV industry. With a growing demand for RVs and a shift in consumers' travel preferences, tourism experts in China anticipate a surge of RV-related businesses in the coming years. According to the “2016 China Campground Industry Report”, there are total of 958 campgrounds in China, of which 489 are under construction. There were about 25,000 RVs in China by 2016. 33% of the campgrounds are located along the eastern part of China, for instance Shandong, Jiangsu, Shanghai, Zhejiang, Fujian and Guangdong), while another 22% are in western China, for instance Inner Mongolia, Gansu, Sichuan and Yunnan. There are currently around 80 RV manufacturers in China, of which 56 are active. It is predicted that the campground industry will hit a trillion RMB market ($145 billion USD) by 2020, which will also stimulate the RV industry’s development.

China has made a push in recent years to develop domestic tourism, including campgrounds and the RV industry. Campground development has received great support from the central government.  The China National Tourism Administration, together with 10 other ministries, released “Several Opinions on Promoting the Development of Self-Driving Tourism” on November 9, 2016. This set a target of building 2,000 campgrounds by 2020, and allows vehicles to tow trailers which are less than 2.5 tons.

However, the RV industry faces issues such as lack of standards and regulations, as well as the luxury car consumption tax challenge. China Customs does not have an HS code for RVs, so RVs are treated as automobiles upon import.  This means imported RVs have to pay the same high tariffs and duties as imported cars.

Trade Shows and Events
Shanghai Auto Show
Shanghai, April 22-29
 
The 3rd Guangzhou Lithium Battery Industry Expo 2017
Guangzhou, June 2-4
 
Guangzhou Int’l Auto Parts Exhibition
Guangzhou, July 1-3
 
CAS - China Auto Saloon / SEMA Shanghai Business Development Tour
Shanghai, September 6-10
 
Guangzhou Auto Show
Guangzhou, November 18-25
 
Automechanika
Shanghai, November 29-December 2
 
Web Resources
Ministry of Transport of China (MOT)
China Associations of Automobile Manufacturers (CAAM)
China Automobile Dealers Association
 China Automotive Technology and Research Center (CATARC)
Ministry of Commerce (MOFCOM)
Certification and Accreditation Administration (CCC Certification)
Ministry of Information and Technology (MIIT)
 
U.S. Commercial Service Contacts for Automotive Sector
U.S. Embassy Beijing
Jessica (Feng) Tan, Commercial Specialist
T:  +86-10-8531-4804
feng.tan@trade.gov
 
U.S. Consulate Shanghai
Lisa (Beilei) Ouyang, Commercial Specialist
T:  +86-21-6279-8766
lisa.ouyang@trade.gov
 
U.S. Consulate Guangzhou
Lena Yang, Commercial Specialist
T:  +86-20-3814-5173
lena.yang@trade.gov
 
U.S. Consulate Chengdu
Sonny Cui, Commercial Specialist
T:  +86-28-8598-6546
cui.shiyang@trade.gov
 
U.S. Consulate Shenyang
Dongmei Sun, Commercial Specialist
T:  +86-24-2322-1198 * 8142
dongmei.sun@trade.gov
 
U.S. Consulate Wuhan
Catherine Le, Commercial Specialist
T:  +86-27-8555-7791 * 2808
catherine.le@trade.gov

 

 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



China Automotive Trade Development and Promotion