China - Country Commercial Guide
Automotive Industry

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-02-03

Recreational Vehicles and Motorcycles Sector

China continues to be the world’s largest vehicle market by both annual sales and manufacturing output, with domestic production expected to reach 35 million vehicles by 2025. Based on data from the Ministry of Industry and Information Technology, over 25 million vehicles were sold in 2019, including 21.44 million passenger vehicles, down 9.6% from 2018, and 4.32 million commercial vehicles, down 1.1% from 2018.

U.S.-made vehicles exported to China have faced high tariff barriers in recent years. However, after China suspended its retaliatory tariffs on U.S. automobiles in late 2019, they now generally face the same 15% tariff China applies to most major trading partners. Vehicles (HS codes 8703 and 8704) were included in the U.S.-China Phase One Trade Agreement, which is a potential opportunity for U.S. exporters.

In the wake of the COVID-19 pandemic, the Chinese government has taken steps to buttress automobile consumption. These steps include postponing the implementation of the China Six Emission Standard, providing fiscal and taxation support, speeding up the elimination of obsolete diesel trucks, and optimizing secondhand vehicle trading channels. These efforts may have helped as Chinese auto sales for September 2020 are up 12.8% over September 2019. 

From 2017 to 2019, China’s imports of motor vehicles decreased from 1,246,800 to 1,086,000, while imports from the United States decreased from 274,241 to 194,272 vehicles.

Chinese Auto Imports; 2017-2019
Chinese Auto Imports; 2017-2019


Sources: Global Trade Atlas, Ministry of Industry and Information Technology, China Association of Automobile Manufacturers.

Recreational Vehicles (RVs)

China’s RV market has undergone significant changes over the past several years, including a national focus on the development of tourism, campgrounds, and the RV industry. With growing demand for RVs and a shift in consumers’ travel preferences, tourism experts in China anticipate a surge of RV-related business in the coming years. U.S. Department of Commerce data shows exports of U.S.-made RVs to China in 2019 were valued at over $1 million, a significant decline from 2018. U.S.-made RVs enjoy a good reputation for performance and comfort in China, so the decline is primarily attributable to bilateral trade tensions and the related uncertainty of tariff rates. 

The International Trade Administration (ITA) 2018 Top Markets Report: Recreational Transportation estimated the total stock of RVs in China could reach 500,000 RVs by the end of 2020.Given the challenges associated with COVID-19 that number is unlikely to be realized, however, China’s RV market was on a steady upward trend before the pandemic. As the pandemic situation improves, demand for RVs is projected to increase, as Chinese consumers seek a safe, socially distanced vacation alternative, particularly to low-population density areas within China. 

RV leasing and rental markets are also reporting growth as people who cannot afford an RV or are not frequent travelers are renting RVs instead. Motorhomes were also used for emergency relief efforts during the COVID-19 outbreak. U.S. sales to China are expected to increase as customs clearance bottlenecks are overcome in the second half of 2020. 

Challenges for this subsector include an immature RV travel culture, limited infrastructure (e.g., lack of RV parks and associated amenities), consumption taxes, as well as increasing competition from domestic RV manufacturers.

Motorcycles

Unlike the passenger vehicles sector, China’s motorcycle industry, centered in Guangdong and Zhejiang Provinces and the city of Chongqing, has enjoyed significant market growth, with sales of nearly 40 million vehicles in 2019, a year-on-year increase of 7.9%. 

According to research by the China Association of Auto Manufacturers, motorcycle production and sales of domestically-made volume rose to 17.3 million and 17.1 million respectively in 2019, up 11.5% and 10% from 2018 while China imported 22.7 million motorcycles, a year-on-year increase of 4.3%.  Electric motorcycles and models with an engine displacement size over 250 cc are the two fastest-growing sub-categories.

Obstacles for further growth of U.S. exports of motorcycles to China include a 10% consumption tax for motorcycles with an engine displacement of 250 cc or greater and bans on motorcycles in certain areas and on certain types of roads. Domestic production of less expensive motorcycles is also projected to increase. 

From 2018 to 2019, China’s production of motorcycles increased from 15.5 million to 17.3 million, while exports dropped from 7.3 million to 7.1 million. 

Chinese Motorcycle Manufacturing; 2018-2019
   Chinese Motorcycle Manufacturing; 2018-2019

 
Source: China Association of Auto Manufacturers 

Trade Events

All in Caravaning
June 18-20, 2021, Beijing 

The 19th Shanghai International Automobile Industry Exhibition
April 21-28, 2021, Shanghai

Web Resources

Ministry of Transport of China (MOT)
Ministry of Commerce (MOFCOM) 
Ministry of Information and Technology (MIIT)     
China Association of Automobile Manufacturers (CAAM)