China has surpassed Japan to become the world’s largest vehicle exporter in 2023, according to data from the Japan Automobile Manufacturers Association.
The surge in China’s auto sector can be attributed to substantial investments in electric cars, an area where Japanese companies have shown more caution.
Last year, Japan exported 4.42 million vehicles, as reported by JAMA figures.
In contrast, China exported 4.91 million vehicles, according to the China Association of Automobile Manufacturers.
China’s customs bureau reported an even higher number of 5.22 million, marking a remarkable 57 percent year-on-year increase, with one in three of these vehicles being fully electric.
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While Japan had been trailing China in monthly vehicle exports, the latest data solidifies China’s position as the top exporter for the entire year.
Japanese automakers, including the world’s largest company by unit sales, Toyota, produce substantial volumes of vehicles in other countries.
In 2022, Japan produced 7.84 million vehicles domestically (excluding motorcycles), while overseas production reached almost 17 million units.
Unlike their Chinese counterparts, Japanese manufacturers have traditionally focused on hybrid models combining battery power and internal combustion engines, such as the Toyota Prius.
In 2022, only 1.7 percent of cars sold in Japan were electric, in contrast to approximately 15 percent in Western Europe, 5.3 percent in the United States, and nearly one in five in China.
Japanese automakers are now committing to increasing their electric vehicle (EV) presence, with Toyota aiming to sell 1.5 million EVs annually by 2026 and 3.5 million by 2030.
The company has also heavily invested in battery technology, banking on the mass production of solid-state batteries, promising faster charging and extended range.
Chinese company BYD recently surpassed Tesla in all-electric vehicle sales, benefiting from strong government support in Beijing.
However, China’s success in the electric vehicle market has raised concerns, with regulators in Western markets accusing Chinese firms of anti-competitive practices such as price-dumping.
In response to China’s growing dominance, European Commission president Ursula von der Leyen announced an investigation into Chinese state subsidies for electric cars in September.
This probe could potentially lead the European Union to impose duties on cars sold at what they consider an unfairly low price, undermining European competitors.
Analysts draw parallels with Japan’s automotive export boom in the 1980s, noting that Japan addressed the issue by establishing numerous overseas factories, producing four times more vehicles abroad than they exported, as highlighted by Christopher Richter, an auto analyst at CLSA in October.
