The Global Expansion Game, The "Easy Mode" Has Come to an End | Renqi

Don't transplant that domestic 'involution' style to overseas markets.

Chinese automotive overseas expansion is standing at a subtle inflection point. One side is export data continuously breaking records, the other side is institutional encirclement by the US and Europe and domestic compliance guidelines tightening simultaneously. These two forces converge, pointing to the same signal: The Easy Mode that relied on low prices and rapid distribution to conquer territory is heading towards its end.

Looking back at the past few years, Chinese domestic automakers were competing furiously at home, yet overseas they were like tigers descending the mountain. In the first 8 months of 2026, passenger car exports surpassed 6.098 million vehicles, and breaking 10 million for the full year is almost certain. New energy vehicles are even more unstoppable, accounting for more than half of exports for 6 consecutive months. The European market was once seen as a high-margin paradise; BYD's overseas gross margin was 28.4%, while domestic was only 17%. Overseas profits were more than 40% higher than domestic — such temptation, who could not be moved?

But the high-margin window is narrowing. Data from Orient Securities shows that BYD's overseas revenue per vehicle in the first half of the year has decreased year-on-year by 16,000 yuan. Scale brings down the average price, and overseas business is sliding back into the old path of 'trading price for volume'.

Southeast Asia, Middle East, South America: some Chinese automakers are concentrating into the A-segment new energy track, prices heavily overlapping in the 100,000 to 150,000 yuan range, transferring that domestic strategy over unchanged. In the Thailand market, Geely EX2 won the EV sales champion with price-performance advantages; local media said 'Thailand is crossing the river by feeling its way through China'. This sounds familiar, but it's not funny.

Exporting domestic 'involution' overseas, the first thing to rebound is trade barriers. EU anti-subsidy duties on Chinese pure EVs have already taken effect: BYD 17%, Geely 18.8%, SAIC 35.3%. In 2025, China's plug-in hybrid exports to Europe skyrocketed 155%, and the EU immediately set out to plug the loopholes, planning to expand tariffs to plug-in hybrid models. The US has gone further; the Automotive Innovation Alliance is pushing Congressional legislation to attempt to permanently ban the sale, import, and manufacture of Chinese connected cars and their software/hardware in the US. This is no longer tariff friction, but systemic exclusion at the source of market access.

Right at this crucial juncture, on September 1st, the Ministry of Commerce, Ministry of Industry and Information Technology, and State Administration for Market Regulation jointly released the "Guidelines on Overseas Competition Behavior and Compliance Construction for the Automotive Industry". The document is not long, four chapters and twenty articles, but one sentence is worth reading repeatedly: "When enterprises formulate overseas recommended retail prices, they should avoid affecting overseas consumer interests and brand image due to 'frequent and significant price fluctuations'". In plain speak: Don't randomly cut prices overseas.

The timing of this guideline's release is subtle. When exports were hottest, the state intervened to regulate price cuts, indicating the issue is no longer 'whether to sell' but 'how to sell'. Domestic automotive manufacturing profit margins have dropped to 2.4%; price wars have gone to this extent, there are no winners. If this approach is replicated overseas, the only result will be lower profits, more frequent trade friction, and worse brand image.

SAIC's path is worth examining closely. From January to August this year, SAIC overseas cumulative sales broke one million vehicles, reaching 1.016 million, a year-on-year increase of 52.9%. At the same time, European market cumulative deliveries also reached one million units. The MG brand ranked among mainstream players in multiple European countries; France entered brand sales TOP 10, and Italy cumulative users broke 150,000.

But more noteworthy than the numbers is that SAIC is advancing the "Glocal Strategy" — deep integration of global vision and localized operations. Jumping out of the primary logic of "selling cars overseas", completing the iteration from "product overseas" to "system overseas".

At the Intangible Cultural Heritage Peasant Painting Exhibition held at the Brussels Chinese Cultural Center, the MG S6 Art Custom Car was unveiled, where Chinese aesthetics and European urban civilization had cross-border dialogue. This is no longer simple car selling, but the rooting of brand culture.

SAIC's system capabilities are also being consolidated. Three global innovative R&D centers, three major vehicle manufacturing bases in Thailand, Indonesia, and India, over a hundred parts supporting bases. This year the German Frankfurt European Engineering Center was commissioned, and construction of European production bases started simultaneously. Over 3,000 overseas marketing service outlets, 42 own-roll-on/roll-off ships, annual capacity broke 600,000 vehicles. At the same time, achieving brand integration through cultural cross-over and local adaptation, truly landing the Glocal development model.

From "Going Out" to "Going In", there is no shortcut on this road.

The core subject for major exporters in the future is no longer how to ship cars out, but how to manufacture, operate, and build interests compliantly in target regions. EU tariff expansion and supply chain localization requirements all point in the same direction: Without local capacity, there is no stable market access. BYD Hungary factory has started trial production, Chery and Nissan signed a MoU, hoping to OEM in Sunderland factory, SAIC invested 200 million Euros to build MG European factory in Spain. Localization is not only a means to avoid tariffs, but also a necessary condition to meet data compliance, supply chain audit and public procurement thresholds.

Market segmentation is also accelerating. High barrier markets like the US and Europe, only leading enterprises with local production, joint venture or local team capabilities are suitable for long-term investment. Middle East, Latin America, Southeast Asia, Africa and other Global South markets, trade barriers lower, new energy penetration curve steeper, are the core incremental main force for the next 2 to 3 years. But must also prepare early for local pricing, parts after-sales, local compliance, avoiding replicating the low-price problems of early Europe.

The game of going global has reached the time to change tactics. Growth in volume is already amazing enough; what comes next to watch is quality, and even more sustainability. From complete vehicle export to local manufacturing, from trade export to system export, from price competition to brand rooting — Volume, Quality, Glocal model moving forward together is what going global should look like.

10 million vehicles is a milestone, and also a reminder. Price wars end with a full industry profit margin of 2.4%; there are no winners. Overseas markets should not walk this old path again.