China thrives as center of global brand exports

China is emerging as an important export hub for international carmakers as they rev up efforts to make better use of their manufacturing facilities: either because of competition from local car marques or the country's expertise in electric vehicle production.

Nissan said last week that it expects to export vehicles made at its Chinese plants from 2025, aiming for a 100,000-unit level.

This is part of the Japanese carmaker's new business plan called The Arc, which covers the period from its fiscal year in 2024 to 2030.Its fiscal year runs from April 1 to March 31.

It did not offer details about what models will be shipped from its Chinese plants to other markets. Last year, it sold 793,800 vehicles in China, down from 1.05 million units in 2022.

Earlier this month, the Nikkei reported that Nissan might cut annual production capacity in China by as much as 500,000 units from the current level of 1.6 million.

But the Japanese carmaker expects its sales in the country, its second-largest market after the United States, to return to the 1-million-unit level by the end of the fiscal year 2026, according to its new plan.

Part of its efforts to realize this goal is to refresh 73 percent of Nissan-branded models in the country by that time and launch eight new energy models, four of which will bear the Nissan logo.

Nissan is the latest international carmaker that has announced plans to ship vehicles from China to other markets, as they are losing ground to local car marques, primarily because of their hesitance toward electrification.

From the third quarter of 2023, Honda's Chinese joint venture with GAC had started to ship the Odyssey MPVs back to Japan.

Its other Chinese joint venture, Dongfeng Honda, saw its first shipload of vehicles, including the hybrid CR-Vs and the electric e: NS1s, leaving for Europe in May 2023.

Japanese carmakers are not alone. Ford, the second-largest vehicle maker in the US, saw its exports of China-made vehicles exceed 100,000 units last year.

It was not the first year that Ford had shipped overseas vehicles made at its Chinese plants but the exports hit a record high, said the carmaker.

The destinations of those vehicles include the Middle East, Southeast Asia and the Americas. Ford said the models exported from China are not locally made in those regions so they complement the carmaker's local product portfolio.

Some other global carmakers have made China an export hub because of China's advantages in electric vehicle production, ranging from sound supply chains and experienced local employees.

Tesla's Shanghai plant has long been its major regional export center. It started to ship vehicles from 2020 and the export volume reached 344,000 units in 2023, accounting for over a quarter of China's total new energy vehicle exports.

When meeting workers at the Shanghai plant in June 2023, CEO Elon Musk said: "I tell people throughout the world, the cars we produce here are not just the most efficiently produced, but also the highest quality."

German carmaker Volkswagen joined Tesla's ranks in late 2023, as electric Cupras rolled off the assembly line at its joint venture Volkswagen Anhui's plant and were shipped back to Europe.

The German carmaker said the plant was built in a record 18 months. The batteries for its vehicles are locally produced at Volkswagen's own plant as well. Most of the car plant's annual capacity of 350,000 units is for the Chinese market, though.

In 2023, China exported 4.91 million vehicles, up 57.9 percent year-on-year.