For Chinese cars abroad, the road's getting wider but tougher

Be more confident but it's not time for champagne yet — that's what I might probably say to Chinese carmakers going global.

I have my reasons. Over the past three years, the rise of China's vehicle exports has been meteoric. The surge started suddenly in 2021. Exports touched a phenomenal 2 million vehicles, taking even industry insiders by surprise.

That's because for almost the whole of the preceding decade, the figure stayed at around 1 million units, although China became the world's largest vehicle market 12 years before (in 2009).

Exports hit a new high of 3.11 million units in 2022, overtaking Germany as the world's No 2 vehicle exporter. Chinese cars garnered both attention and orders in developed markets like Europe, Australia and Japan as well as emerging ones like Thailand.

The China Association of Automobile Manufacturers said auto exports would grow by at least 20 percent year-on-year this year to 3.73 million units. Some analysts are even more optimistic, saying the figure could touch 4 million.

But everyone agrees it's not going to be a "live happily ever after" story. Auto markets are known for ferocious, intense competition. New models, if successful, can sound the death knell for others.

If you look back, it's not hard to realize the surge in 2021, which is widely seen as Chinese carmakers' preliminary overseas triumph, was primarily the result of the competitive edge of "made in China".

An important factor was, foreign carmakers' production was slashed by the COVID-19 scenarios, whereas most auto plants in China weren't disrupted severely because the pandemic was brought under control relatively sooner, said the CAAM.

But it's true that China's first-mover advantage in electric vehicles is generating new opportunities with their acceleration and futuristic features, including big displays, onboard karaoke and automatic parking.

Auto giants in both Germany and Japan are slower in their transition to the new era because of their dominant position and good profit in the internal combustion engine vehicle sector.

So the leading position in the new game of EVs has emboldened Chinese carmakers. Zhao Aimin, executive vice-president of SAIC International, said what Chinese carmakers have achieved in global markets has motivated and emboldened many veterans, including himself, in the industry.

SAIC's MG4 Electric, developed for the global market, has been well received. The model is expected to see its R&D cost of around 1 billion yuan ($145.6 million) being recovered in around 2.5 years, half the time for most models.

This has made the carmaker more determined to launch more such models developed by its Chinese and international teams based on demands of overseas customers.

But global giants including Volkswagen and BMW are designing, developing and launching their own EV models as well. In terms of scale and brand awareness, Chinese brands are no match at all.

When Chinese EV startup Nio expanded into Germany last year, CEO William Li said it's no more than a "primary school student "compared with those car giants in Europe, despite local media reports that Nio is launching an offensive to take those behemoths head on.

"Europe is the home turf of our respectable rivals, and they have a much deeper understanding of local customers and the car industry itself. They are definitely the examples we want to learn from," he said.

The difference isn't limited to understanding. Among Chinese auto exporters, SAIC has been the largest exporter for seven years in a row, accounting for roughly one-third of the total. The carmaker said it has just started to make money in overseas markets.