Introduction

Chinese companies are increasingly making their mark on the global stage. Recently, BYD and other Chinese electric car brands made announcements about their plans for the European market at a German auto show. These companies’ exports have been a bright spot in China’s overall trade slump, as shown by customs data. In fact, overseas sales have helped boost China’s auto sector earnings by 46% in the second quarter compared to the previous year, according to UBS Securities’ China Equity Strategist Lei Meng.

Expanding Electric Car Market

Counterpoint Research reports that in the second quarter, BYD, state-owned SAIC, and other Chinese companies captured 9% of the global electric car market, up from 5% in the previous quarter. This is in addition to their significant share in the domestic Chinese market, which is the largest globally for autos. CLSA analysts predict that BYD will become one of the world’s top ten original equipment manufacturers this year and climb into the top five by 2026. Toyota currently holds the top spot with 10.43 million units sold in 2022.

Following Toyota’s Footsteps

BYD’s growth strategy mirrors that of Toyota, which started increasing its overseas exports about 60 years ago and eventually became the world’s largest automobile manufacturer, surpassing General Motors in 2008. However, Toyota is now facing challenges in maintaining a strong presence in the all-electric car market.

Expanding Beyond EVs

The slowdown in China’s economic growth has prompted companies, including startups, to explore opportunities abroad. Despite an 8% year-on-year earnings decline in mainland Chinese stocks (A shares) in the second quarter, the machinery sector has seen positive growth due to strong exports. XCMG, a construction machinery company listed on the Shenzhen stock exchange, reported a 33.5% increase in international revenue in the first half of the year, accounting for 41% of total revenue. The company experienced significant revenue growth in various regions, including West Asia, North Africa, Central America, Europe, Central Asia, and North America.

Other Chinese Global Players

Chinese companies have been actively expanding globally with support from the Chinese government. State-owned shipping giant Cosco operates vessels worldwide, while Haier, a Shanghai-listed company, acquired GE’s appliance unit in 2016. Mingyang, another Shanghai-listed company, leads the global wind power industry. In the medical devices sector, Mindray, China’s largest homegrown manufacturer, ranks among the top 50 in the world. The company has experienced significant growth in overseas sales, particularly in Europe.