Chinese automakers are reshaping the global automotive landscape.

According to UBS analyst Paul Gong's team, Chinese automakers are entering the 2.0 phase of their globalization strategy after a five-year explosive expansion that saw overseas sales surge from 1 million to 6 million units. Backed by technological advantages in electric vehicles (EVs), an increasingly robust distribution network, and growing brand recognition, Chinese automakers are projected to capture one-third of the global automotive market by 2030.

This ambitious target is built on solid foundations. Overseas sales already account for 20% of China's total auto industry sales, contributing 40%-50% of revenue for some automakers. Leading players like BYD Company Limited boast overseas gross margins of 27.3%, significantly higher than the 17.7% domestic margin, highlighting strong profitability in international markets.

UBS emphasizes that as domestic market growth slows and demand saturates, overseas expansion will be critical for growth prospects in 2026. Chinese automakers are addressing market volatility, protectionism, and intensifying competition by building brand trust, expanding distribution channels, and accelerating localized production.

**Tech Edge Drives Market Penetration** Chinese automakers are leveraging their technological leadership in EVs and smart features to rapidly gain market share. Supported by China's vast, advanced, and efficient supply chain, they outperform Western peers in cost efficiency and production capabilities.

Fierce domestic competition has also honed their agility, enabling faster development of localized models tailored to regional demands. Chinese brands cater to diverse needs by offering vehicles ranging from compact to large sizes, with body styles including sedans, hatchbacks, SUVs, MPVs, and pickups.

These products come with multiple powertrain options—pure electric, plug-in hybrid, and extended-range EVs—accommodating varying budgets, road conditions, and charging infrastructure levels.

**BYD Leads as Chinese Brands Gain Global Recognition** As Chinese auto exports shift from budget internal combustion engine vehicles to mid-range EVs, brand perception is rising.

UBS's annual global EV survey found BYD Company Limited to be the fastest-growing Chinese EV brand in Europe by 2025, with acceptance now on par with established Western brands. Chinese EVs typically retail at around $30,000 overseas, positioning them as mid-range rather than budget offerings.

Digital experiences, such as large screens and voice controls—powered by China's electronics supply chain and software teams—add competitive appeal for tech-savvy consumers.

**Localization: A Key Strategy** Localized overseas production is becoming a trend among Chinese automakers.

Thailand already hosts full-production plants for SAIC, Great Wall Motor Company Limited, and BYD Company Limited, plus assembly facilities for GAC, Changan, and Chery. In Brazil, Great Wall Motor Company Limited plans to expand capacity by 50,000 units, while BYD Company Limited will add 150,000 units by 2025. Additionally, BYD Company Limited aims to establish a 150,000-unit plant in Hungary by 2026, marking its EU foothold.

UBS estimates that localized production allows BYD Company Limited to bypass tariffs and reduce logistics costs. Despite 10%-20% higher EU procurement and manufacturing expenses, tariff and shipping savings could outweigh added costs, improving margins or enabling flexible pricing.

**Diverging Expansion Paths** UBS notes varied overseas strategies among Chinese automakers: - Chery leads in overseas sales volume, exceeding 1 million units (40% of total sales). - BYD Company Limited is expanding fastest, growing overseas sales from 50,000 units in 2022 to 950,000 by 2025. - Great Wall Motor Company Limited prefers full localized manufacturing, with capacities of 150,000 units in Russia, 80,000 in Thailand, and 50,000 in Brazil.

**2030 Vision: One-Third Global Share** UBS segments the global auto market into five categories: 1. China (home market) 2. The U.S. (largely inaccessible) 3. Western Europe (semi-protected/semi-open) 4. Japan, South Korea, and India (challenging due to strong local brands) 5. Other regions (fewer restrictions with localized production).

Domestically, UBS expects Chinese brands to grow from 50% market share in 2022 to 70% by 2025 and 85% by 2030. In Western Europe, their share could rise from 5% to 15%, while other global markets may see 25% penetration. Overall, Chinese automakers' global share is projected to jump from under 20% in 2022 to over one-third by 2030.