China’s automotive exports growth will significantly slow down in 2027, a sharp contrast to the surge in 2026, due to tariffs and quotas, according to the latest forecast from the China Passenger Car Association (CPCA).
Analysts said that the Chinese automobile industry is facing the dual pressures of trade tariffs and restrictions from Western nations, as well as a decline in domestic sales.
Cui Dongshu, secretary-general of the CPCA, said at a press briefing on Nov. 9 that export growth is expected to slow down in 2027 to 10 percent from the 75 percent growth surge in the first 10 months of this year.
Cui said that the projected slowdown was mainly because of trade barriers erected by countries to protect local industries, which will weaken the buffer originally provided by overseas markets for Chinese car companies.
After the United States implemented tariffs on Chinese cars, other major overseas markets—including the European Union, Thailand, and Brazil—followed suit by raising their own tariffs or establishing import quotas. With exports slowing and domestic sales in China’s automotive market continuing to decline, the Chinese auto industry faces mounting pressure from both external and internal fronts.
Public data show that sales of passenger vehicles in the domestic market plummeted by about 27 percent year-on-year in October. Cui and senior executives from major car companies, including Geely Auto Vice Chairman Gui Shengyue, have publicly acknowledged that the traditional autumn peak sales season, known as “Golden September and Silver October,” has already vanished. They predicted that this trend may well become the new normal.
The projected slowdown in China’s automobile export growth in 2027 suggests that Western tariffs and trade restrictions are beginning to have an impact, although this does not necessarily mean they have successfully contained China’s automotive expansion, Sun Kuo-hsiang, a professor of international affairs and business at Nanhua University in Taiwan, told The Epoch Times.
These Chinese automobile companies had scaled up the production of batteries, components, and complete vehicles, bolstered by the Chinese regime’s policy support and a massive domestic market, Davy J. Wong, a U.S.-based independent political economist, told The Epoch Times.
“Through intense domestic competition, they have continuously driven down costs and established comprehensive supply chains—advantages in both cost and scale that they then carry into overseas markets. Meanwhile, the push toward electrification in Europe and North America has further opened up market opportunities for Chinese automakers,” Wong said in explaining the rapid expansion of the Chinese companies in overseas markets.
But now, the projected significant export slowdown indicates that the strategy employed by Chinese automakers to rapidly increase overseas sales is encountering significant resistance, Wong said.
However, the United States and European Union shouldn’t become complacent, both analysts cautioned.
“To counter potentially unfair competition more effectively, the United States and Europe should strengthen anti-subsidy investigations, improve transparency regarding Chinese state support, and close regulatory loopholes that allow manufacturers to circumvent tariffs through third-country assembly or indirect exports,” Sun said.
Beside containing Chinese companies’ expansion, Western countries’ domestic automakers must focus on reducing costs and improving their products, Wong said. “While tariffs can buy time, whether these Western domestic companies can ultimately hold onto their market share will depend on the changes they make within their own industries during this period.”
The EU should also examine whether its existing measures adequately address Chinese plug-in hybrid vehicles, which are not covered by its current battery-electric vehicle duties, Sun said.
Separately, the EU and China reached an understanding on hybrid trade under which China’s exports would be cut roughly in half over four years, Caixin reported on Oct. 10.
“Beyond defensive measures, Western governments need to coordinate industrial policies, support domestic battery production, invest in technological innovation, and establish transparent rules for foreign investment and local manufacturing,” Sun said.
A Zeekr electric vehicle display in Sydney, Australia, on Oct. 25, 2024. Susan Mortimer/The Epoch Times
Coordinate China Policies
Canada has partially opened its doors to imports of Chinese vehicles, and Bulgaria has permitted the Chinese automaker Great Wall Motor to establish a manufacturing plant in the country.
This will undermine policy consistency while simultaneously creating more opportunities for Chinese automakers to enter these markets, Wong said.
“The interests of the automotive industry, the agricultural sector, and consumers do not always align—which explains why it is difficult for Western nations to consistently maintain a unified stance toward China’s economic expansion,” Wong said.
Sun said that ultimately, the greatest challenge is not simply Chinese automotive expansion but the lack of coordination among Western countries, which Beijing could exploit to undermine collective trade defenses and economic security.
“The EU should strengthen anti-circumvention investigations, enforce rules of origin, scrutinize Chinese state subsidies, and ensure that foreign investments generate genuine local economic benefits,” Sun said.
Data security is also increasingly important, Wong said. The United States has already enacted restrictions on China-linked connected cars, indicating that market access implicates both product safety and national security, he said, adding, “[The] EU and the United States already have tools such as rules of origin, anti-circumvention investigations, subsidy reviews and connected car supervision.”
People visit the exhibition of Chinese electric car maker BYD at the Essen Motor Show in Essen, Germany, on Nov. 29, 2024. AP Photo/Martin Meissner
Pressure From China’s Sluggish Domestic Market
Almost all of China’s key Purchase Manager Indexes fell below the 50-point threshold separating expansion from contraction in October.
China’s domestic economic slowdown is placing increasing pressure on its automotive industry, particularly through weak consumer confidence, sluggish household spending, intense price competition, and persistent industrial overcapacity, Sun said.
“China’s automotive expansion reflects not only its technological competitiveness and manufacturing strength but also deeper structural weaknesses in its domestic economy, making export dependence an increasingly important source of growth and a potential source of international trade conflict,” he said.
The Chinese automotive industry currently faces a contradiction: Production capacity is expanding rapidly, while household purchasing power has not kept pace, Wong said.
“Long-term improvement remains contingent upon household income, social security, and consumer confidence. As long as the recovery of domestic demand remains sluggish, companies will continue to rely on overseas markets—making the Chinese auto industry increasingly and directly vulnerable to shifts in foreign trade policies,” Wong said.
Luo Ya and Li Yan contributed to this report.
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