Tariff impact on Chinese automakers is muted, report says
Chinese automakers are turning to Russia and the Middle East to offset the impact of global tariffs imposed by the U.S., Europe and other countries.
Why it matters: Despite the global tariff storm, China remains an industry juggernaut, dominating vehicle sales in its home market while continuing to expand exports around the world.
Driving the news: Automotive executives from around the world are convening this week at the Shanghai auto show, in part to gauge their competitiveness against their fast-moving Chinese rivals.
New research from AlixPartners, the global consulting firm, shows just how strong China's auto industry has become.
By the numbers: China's exports soared 23% in 2024, to 6.4 million passenger vehicles, more than 50% above second-ranked Japan.
Russia and the Middle East together accounted for 35% of China's vehicle exports in 2024, surpassing combined shipments to Europe and North America for the first time.
AlixPartners forecasts Chinese brands will account for 30% of the global automobile market by 2030, compared with 21% last year.
"China's car sales to Russia and Belarus have more than doubled over the past five years, insulating it in part from the volatility of tariffs," said Andrew Bergbaum, global leader of the Automotive and Industrial Practice at AlixPartners, in a press release.
Yes, but: That doesn't mean China's auto industry is unaffected by the trade war.
Tariffs imposed by the U.S. and others would increase the cost of China's exported vehicles and auto components by about 24%, or $46 billion, estimates AlixPartners, based on 2024 export data.
That represents just a tiny fraction of China's total automotive output, however, the report noted.
Nearly $45 billion of that extra cost is attributed to U.S. tariffs, but who ultimately absorbs it — automakers, suppliers or consumers — remains to be seen.
Still, as tariffs ripple through the market, China's export growth is expected to moderate to 4% in 2025, AlixPartners projects.
Growth in China's domestic market, meanwhile, is expected to continue in 2025, with sales up 4%, to 26.8 million vehicles, driven by sales of electric and hybrid vehicles, along with demand for assisted-driving technology.
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