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Open Access Library Journal
2023, Volume 10, e10055
ISSN Online: 2333-9721
ISSN Print: 2333-9705
DOI:
10.4236/oalib.1110055 Apr. 28, 2023 1
Open Access Library Journal
Research on China’s Automobile Industry
Export Trade to ASEAN under the Background
of the Belt and Road Initiative
Qingxia Lin1, Mengdi Zhang1,2*, Zhilin Zeng3
1Institute of Foreign Languages, Guangdong University of Petrochemical Technology, Maoming, China
2School of International Studies, Universiti Utara Malaysia, Sintok, Malaysia
4Faculty of Environment, Guangdong University of Petrochemical Technology, Maoming, China
Abstract
The global COVID-
19 has been in a repeating phase from 2019 to 2022,
which has had a significant negative influence on commerce and the economy
worldwide. The impact of the automotive industry has also altered signifi-
cantly throughout this time. Several nations are scurrying to take advantage
of the chance to revive the industrial sector. In an effort to help China’s au-
tomotive industry overcome the challenges posed by COVID-
19 and actively
integrat
e into the ASEAN market, this project will combine The Belt and
Road initiative with an analysis of the current situation and development po-
tential for exporting Chinese automobiles to ASEAN. In light of this, this
study’s suggestions and strategies will b
e formulated to promote the export of
Chinese automobiles to ASEAN, ultimately injecting new growth impetus in-
to the industry’s development.
Subject Areas
International Business
Keywords
Chinese Automobile Industry, ASEAN, The Belt and Road Initiative
1. Introduction
In recent years, Chinese automobiles have increasingly entered the ASEAN and
international markets due to growing export commerce [1] [2] [3]. Between
2015 and 2018, China’s exports of automobiles showed an increasing trend.
How to cite this paper:
Lin, Q.X., Zhang,
M
.D. and Zeng, Z.L. (2023)
Research on
China’s Automobile Industry Export Trade
t
o ASEAN under the Background of the Belt
and Road Initiative
.
Open Access Library
Journal
,
10
: e10055.
https://doi.org/10.4236/oalib.1110055
Received:
March 23, 2023
Accepted:
April 25, 2023
Published:
April 28, 2023
Copyright © 20
23 by author(s) and Open
Access Library Inc
.
This work is licensed under the Creative
Commons Attribution International
License (CC BY
4.0).
http://creativecommons.org/licenses/by/4.0/
Open Access
Q. G. Lin et al.
DOI:
10.4236/oalib.1110055 2
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However, the global pandemic that started in 2019-2020 has significantly im-
pacted commerce and the world economy, causing a decline in China’s automo-
bile exports. Despite the challenges, in 2021, Chinese vehicle exports exceeded
2.138 million units, experiencing a 102% year-over-year increase. Chinese ex-
ports of new energy cars also reached 588,000 units this year, with the upward
trend persisting (as shown in Figure 1). In terms of sales, exports from 2017 to
2021 have gradually increased. The export volume of Chinese automobiles in
Asia heavily relies on the ASEAN market’s contribution (Table 1). It is worth
mentioning that, as the economy and people’s living conditions have improved
in recent years, there has been a significant increase in the demand for vehicles
in ASEAN nations [4]. Additionally, the ASEAN area has also started paying
more attention to the automobile sector. Given the considerable auto market in
ASEAN today, China should seize this golden opportunity, capitalize on its
competitive edge, and use ASEAN as a springboard to actively enter the ASEAN
auto market.
2. Economic Environments in the ASEAN Region
Automobile ownership in each country is influenced by factors such as national
income level, population size and infrastructure, and GDP per capita. Among
these factors, GDP per capita has the most significant impact on automobile
demand. Hence, it can be deduced that the volume of demand for automobiles
in different ASEAN nations varies based on the economic development, demo-
graphic distribution, and national policies of the ten ASEAN member countries.
For instance, the Philippines, Thailand, Vietnam, Malaysia, and Indonesia have
relatively high per capita GDPs and intense economic levels, resulting in higher
demand and better automobile purchasing power [5]. Therefore, these countries
have the significant market potential for China’s auto sector in the South Asian
market. According to survey data, automobile sales in eight countries, including
the Philippines and Vietnam, exceeded 40,000 units in 2021. Additionally, Saudi
Arabia had an import volume of more than 130,000 units that same year (As
shown in Table 1).
On the other hand, Laos, Myanmar, and Cambodia have low per capita GDPs
due to their low population densities and limited access to land resources, which
makes it challenging for their vehicle markets to meet demand. Singapore and
Brunei are the only developed nations among the ten ASEAN countries. Despite
Singapore’s small land area and dense population, it boasts a well-developed
public transportation system and has no local automotive manufacturing indus-
try. Thus, most cars in Singapore rely on imports. Additionally, due to inflation,
vehicles in Singapore can be relatively expensive. To regulate car ownership,
Singapore has implemented a policy requiring license plate quotas to be vacated
for new cars only when old cars are scrapped [6]. In contrast, Brunei has a high
car ownership rate, but its total population of just over 400,000 means that de-
spite high national income and social prosperity, the automobile market is rela-
tively small.
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Figure 1. Trend of automobile export in Asia in 2017-2021 years.
Table 1. From 2018-2021 the automobile exports volume in Asia.
From 2018-2021 the automobile exports volume in Asia
Automobile exports 2018 2019 2020 2021
Summary
2021
1 season 2 season 3 season 4 season
Total 1,146,064 1,215,580 1,058,913 2,137,977 434,718 513,985 556,403 632,871
Asia
Saudi Arabia 20,793 57,790 97,768 132,997 28,600 35,542 34,801 34,054
Bengal 104,741 146,262 79,793 86,465 20,546 10,548 21,049 34,322
Philippines 26,004 42,927 31,431 60,692 11,557 14,629 18,733 15,773
India 45,420 83,144 49,515 55,396 12,154 8914 13,890 20,438
Thailand 1979 5801 4112 48,752 1796 6608 18,166 22182
Viet Nam 36,639 35,093 33,904 48,511 10,998 17,973 9299 10,241
Malaysia 8650 41,188 37,746 43,708 16,898 11,628 2293 12,889
Pakistan 9061 5393 9225 43,151 8086 14,979 10,598 9488
The United Arab Emirates
4730 8864 9706 24,070 5246 4440 6327 8057
Kuwait 4752 7671 9950 17,825 4550 5008 4319 3948
Uzbekistan 2701 3653 7592 16,590 2457 2463 5020 6650
Korea 4167 4578 6215 13,803 2224 4792 3594 3193
Japan 717 964 996 11,688 2156 3119 2522 3891
Indonesia 4971 5134 2861 10,424 1360 3315 2736 3013
Israel 2371 2852 1824 10,369 1992 2354 2708 3315
Asia Aggregate 514,280 523,350 449,281 715,580 153,047 167,987 177,077 217,469
The ASEAN region, with a population exceeding 600 million, currently has a
low number of automobiles, demonstrating the significant potential for Chi-
nese-made vehicles to enter the ASEAN market [7]. Additionally, ASEAN coun-
tries have shown a growing interest in the automotive industry, recognizing its
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role in promoting economic development and improving living standards. As
such, the demand for automobiles in the ASEAN market is expected to increase
further. Despite this, the current trade volume between China and ASEAN re-
mains low. To address this issue, China should capitalize on this opportunity to
export Chinese automobiles to the ASEAN market, promoting automobile trade
exchanges between the two parties and achieving mutual development.
3. Challenges for the Export of Chinese Automobile to ASEAN
3.1. The Overcapacity of China’s Automobile
Chinese automobiles are currently facing many problems, such as overcapacity,
weak export growth and strong competitiveness in overseas markets. “Overca-
pacity” has always been a pain for the automotive industry. According to statis-
tics, about 20% of the production capacity of China’s automotive industry can-
not be utilized. Affected by many factors such as the global epidemic, policies
and the international market, in the first half of 2019, domestic automobile pro-
duction and sales both recorded negative year-on-year growth, and the export
growth of China’s automotive industry was weak. All these have exacerbated the
negative impact of overcapacity in automobiles. According to data from the
Passenger Car Association, the total passenger car production capacity in China
in 2021 was 40.89 million units, and the capacity utilization rate was 52.47%; the
capacity utilization rate in 2020 was 48.45%. In contrast, the capacity utilization
rate of passenger cars increased by 4% in 2021, but it is still in the range of severe
overcapacity [8]. These macroeconomic factors, combined with weak global
economic growth, sluggish global trade, and ongoing trade conflicts between
China and the US, have significantly impacted China’s automobile export mar-
ket. Against this backdrop of intense competition in the international market,
China’s automotive industry must urgently expand and capture new markets to
inject new vitality into its automobile exports, particularly in the ASEAN region.
3.2. Low Visibility and Credibility of Car Brands
The ASEAN region has established free trade agreements with many countries
globally, including developed countries such as Japan, Australia, and New Zeal-
and, in addition to working on trade relations with China. As a result, Chinese
automobile exports face intense competition in the ASEAN market. To further
complicate matters, Chinese cars currently lag behind other national brands due
to the late development of Chinese independent brands and a lack of consumer
trust in their quality [9]. This weak brand building and marketing overseas has
negatively impacted the competitiveness of Chinese automobile enterprises,
which continue to have a narrow single product structure and limited brand
awareness. As a result, China’s automobile development of the ASEAN market
has been hampered. In terms of competitive positioning, Japan leads the ASEAN
automobile market due to its early arrival in the region during the 20th century.
Japanese cars have gained a reputation and hold a preconceived advantage and
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brand advantage in ASEAN, aided by their suitability for the region’s traffic
conditions. All of these factors create significant challenges for Chinese automo-
bile exports to gain a strong foothold in the increasingly competitive ASEAN
market.
3.3. Increased Resistance to Auto Trade under the Influence of
the Epidemic
China’s automobile trade with ASEAN is currently experiencing challenges due
to declining business flow, which is further amplified by the impact of epidemic
prevention control measures on China’s foreign trade operations. The global
pandemic has led to shrinking demand for Chinese automobiles in foreign mar-
kets, while epidemic prevention policy barriers have increased the risk of uncer-
tainty for domestic small and medium-sized foreign trade enterprises. What
makes matters worse is that China’s internal circulation policy also seeks to re-
duce dependence on exports in the automotive sector.
Cross-border e-commerce has also been impacted by negative sentiments to-
wards the overseas epidemic, which has significantly reduced people’s willing-
ness to export Chinese automobiles. Additionally, logistics delays have signifi-
cantly impeded the support of business flows, which has led to decreased speed
in foreign trade capital turnover [9]. To address this issue, it may be necessary to
increase the liquidity stock and lower the capital efficiency target for export auto
companies, but this puts automobile foreign trade enterprises under severe fi-
nancial pressure. Furthermore, as the flow of import and export businesses
shrinks, the cost of regulating business flows for automobile enterprises has ris-
en.
The combination of rising regulatory costs, logistics delays, and uncertainties
of epidemic prevention policies has led to significant financial pressure on for-
eign trade. These challenges pose a severe hindrance to the growth of Chi-
na-ASEAN automobile trade in the long run.
3.4. Single Category in Exported Automobile in China
As the automotive industry continues to develop, China’s automotive industry
exports have been increasing. In the past, passenger cars have been the bulk of
international new consumption, which has prompted many companies to focus
on this category. Many foreign passenger car production companies have ex-
plored overseas development to tap into the passenger car market, with remark-
able results in opening up and developing markets in developed countries.
However, China’s exported cars still carry their previous characteristics, and a
large part of China’s automotive sales are still commercial vehicles. As a result,
China’s automobile exports are facing the challenge of a single category.
3.5. Imperfect After-Sales Service Network
In the modern business environment, service is a crucial tool for enterprises to
succeed and expand their customer base. After-sales network service is an
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integral part of an automobile sales strategy. A well-designed after-sales service
system is essential for China’s automobile export industry to prosper. Unfortu-
nately, many challenges exist that undermine the image of Chinese auto prod-
ucts. For example, many auto export traders use small-batch auto export trade
modes that result in less concentrated exports. This can hinder the expansion of
sales channels for auto parts, the supply of spare parts, and maintenance servic-
es, thus negatively affecting the acceptance of the local auto market.
4. Opportunities for China’s Automobile Export to ASEAN
Market
4.1. The Prosperity and Development of Chinese Automobile
under the “Belt and Road” Initiative
China’s automobile industry still faces the challenge of overcapacity, which has
become a top priority task for Chinese auto enterprises and the government. To
address this issue, China has adopted the strategic plan of “Belt and Road,”
which promotes economic and trade cooperation with ASEAN countries, meets
the needs of ASEAN countries in foreign trade, and receives support from many
ASEAN countries.
The Belt and Road initiative focuses on regional connectivity, optimal alloca-
tion of resources, and industrial upgrading. With the Regional Comprehensive
Economic Partnership Agreement (RCEP) coming into effect in 2022, the eco-
nomic and trade cooperation between China and ASEAN is expected to become
more robust, providing more opportunities for the Chinese automobile industry.
RCEP has also promoted complementary advantages and deep integration of the
industrial and supply chains, creating more vigorous economic and trade coop-
eration [10].
Cross-border e-commerce has become a new mode of rapid growth in Chi-
na-ASEAN cooperation, effectively mitigating the negative impact of the pan-
demic on trade. The implementation of The Belt and Road concept, RCEP, and
other free trade agreement frameworks can improve the overall competitiveness
of Chinese automobile in ASEAN, provide a good development platform for
Chinese automobile to expand abroad, realize the “China Dream, Car Dream”
and demonstrate the broad market prospects and potential of China’s trade with
ASEAN.
These policies not only address the problem of overcapacity in China’s auto-
mobile industry but also provide sustainable profits and benefits for Chinese
automobile enterprises. Through collaboration with ASEAN countries, China’s
automobile industry can continue to expand its market share and establish itself
as a major player in the global automotive industry.
4.2. ASEAN Market with High-Cost Performance
The demand for high-cost performance has made Chinese automobiles more
competitive in the ASEAN market. Compared to other markets, the low price of
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Chinese automobiles is more in line with the consumption demand of the
ASEAN region. As such, Chinese automobile manufacturers have been actively
developing more high-quality and low-cost vehicles to meet the needs of the
ASEAN automobile market. Economic automobiles have a significant compara-
tive advantage in the ASEAN automobile market, making them the choice for
many consumers in the region.
The Belt and Road initiative and RCEP have accelerated the promotion of the
market layout along the line, thereby driving cooperation between China’s au-
tomobile industry and the ASEAN market [11]. As part of this, China Auto is
committed to becoming the “king of cost performance” in the Middle East auto
market to improve its competitiveness and solve the problem of overcapacity
and export growth sluggishness in China’s automotive sector.
Overall, Chinese automobile manufacturers have focused on meeting the de-
mand for high-cost performance in the ASEAN market by actively developing
high-quality and low-cost vehicles. Through The Belt and Road initiative and
RCEP, China’s automobile industry has improved its collaboration with the
ASEAN market to drive more vigorous economic and trade cooperation. As the
demand for economic automobiles continues to grow in the ASEAN market,
China Auto is poised to further expand its presence and strengthen its position
as a key player in the industry.
4.3. Outstanding and Highly Competitive in the Field of New
Energy
The fiercely competitive nature of the global automotive industry has made it
difficult for weak brands to thrive, especially in the ASEAN market where estab-
lished foreign players dominate. To remain competitive, China’s automotive in-
dustry must adopt a strategy of independent innovation, which will accelerate
the process of new modernizations and optimize the industry structure, ulti-
mately benefiting countries along the Belt and Road.
As the world becomes more environmentally conscious, sustainable develop-
ment strategies have become a priority. The ASEAN region has already set elec-
trification targets for the future, and the transition to new energy vehicles is in-
evitable. China’s new energy vehicle field is mature and at the forefront of re-
search and development, which provides opportunities for greater cooperation
with ASEAN’s automobile market. The implementation of The Belt and Road
initiative creates new and exciting possibilities for China’s automotive industry
to enhance its international market strength, particularly in the ASEAN region.
Embracing this opportunity means China’s automotive industry can further de-
velop sustainably in the Middle East automobile market, while also staying
ahead of the curve by leading the charge towards electrification, networking, in-
telligence, and sharing initiatives. China’s automotive industry has a unique op-
portunity to shape the future of the industry with the “the Belt and Road” initia-
tive. The industry must embrace independent innovation at home and seek co-
operation with ASEAN’s automobile market to compete with established foreign
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auto brands. By doing so, China’s automotive industry can develop steadily and
sustainably, establishing its presence in the global automotive market for years
to come.
5. Countermeasures for China’s Automobile Export to
ASEAN
China’s automotive industry can undertake several measures to enhance its
competitiveness in the ASEAN market.
Firstly, the industry should actively promote the establishment of a regional
automobile industry cooperation system, deepen regional international industry
cooperation mechanism, and take advantage of the benefits of the free trade
zone. It should explore the ASEAN market actively and utilize the region’s tran-
sit potential to develop cooperatively and explore overseas markets jointly. Free
trade zones can significantly reduce operational costs for China’s automotive
industry and promote cooperation in the automobile field.
Secondly, it is imperative that Chinese enterprises prioritize scientific and
technological innovation, focusing on independent innovation. The industry can
accelerate the process of new modernizations and establish it as the core compe-
titiveness of China’s automobile export. Furthermore, China’s automotive in-
dustry should continue to invest heavily in the new energy sector to establish the
future’s new heights. Being ASEAN’s largest trading partner provides opportun-
ities for enterprises to expand international market cooperation and take advan-
tage of opportunities.
Thirdly, Chinese automobile foreign trade enterprises should establish a
sound management and after-sales operation mode, breaking away from the
outdated single and unchanging trade mode [11]. Marketing strategies should
prioritize after-sales service as an essential promotion method. Reliable af-
ter-sales service can enhance the reputation and credit of enterprises, attracting
more foreign investment. Therefore, Chinese automobile foreign trade enter-
prises should establish perfect after-sales service, provide timely consultation
and service for consumers to meet their needs, gradually improve the quality of
automobile products, and retain customers.
Fourthly, China’s independent brands should form a group when going over-
seas. Just like Huawei, Chinese automobile enterprises should also seek to estab-
lish an international presence. To succeed in foreign markets, Chinese automo-
tive brands need to establish distinctive brand identities and values that appeal
to customers. This is the critical key to differentiation, allowing them to stand
out from their competitors. Therefore, when going overseas, Chinese brands
should work together to establish themselves in the market, jointly promote
their brands, and build a positive image overseas.
In conclusion, the Chinese automotive industry needs to prioritize the estab-
lishment of a regional automobile industry cooperation system, remoting inde-
pendent branding, prioritizing independent innovation and establishing new
modernizations as core competitiveness, and enhancing after-sales operations, to
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expand in the ASEAN market. By doing so, China’s automotive industry can
climb higher on the international ladder while enhancing the country’s overall
economic standing.
6. Conclusions and Implication
The automotive industry is one of the key pillars of China’s manufacturing sec-
tor and plays a significant role in economic development, creating employment
opportunities, and driving industrial transformation. However, the global eco-
nomic downturn from 2019 to 2020 had a severe impact on China’s automobile
exports, resulting in a sharp decline in export trade and presenting new chal-
lenges to the industry. To overcome the challenges and adapt to changing mar-
ket conditions, automobile export enterprises must continuously optimize their
export structure, improve their research and development capabilities, enhance
brand influence, and overcome technological barriers. Through these efforts,
Chinese automobile export enterprises can continue to grow and truly enter the
international market.
Exporting China’s automobile industry to ASEAN countries faces unknown
opportunities and challenges, both advantages and disadvantages [12]. In order
to develop and grow in the ASEAN market, China Automotive should combine
the Belt and Road initiative and implement corresponding cooperation strategies
according to the needs of different ASEAN countries’ markets to solve the prob-
lems faced by China Automotive in developing the ASEAN market. As a result,
China Auto will increase its exports to the ASEAN market, open up a new pat-
tern of competition in the ASEAN market, further strengthen its competitive-
ness in the ASEAN market, and promote Chinese auto brands to enter the
ASEAN market and go global.
To ensure long-term success, the industry must also overcome technological
hurdles to compete with global players continually. By focusing on innovation
and investing in technology, Chinese automobile export enterprises can main-
tain their competitiveness and establish themselves as key players in the interna-
tional market. In conclusion, by staying ahead of the curve and improving their
adaptability in a dynamic global market, the Chinese automotive industry can
rise to new heights and contribute to China’s further economic growth.
Acknowledgements
This work was supported by National College Students’ Innovation and Entre-
preneurship Training Program (No. 73322108).
Conflicts of Interest
The authors declare no conflicts of interest.
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