The "Code of Restraint" and Invisible Ceiling of Chinese Automotive Globalization

Written by | Mo Li

Edited by | Huang Dalu

Designed by | Zhen Youmei

Featured Image | AI

BYD 2 million units, Chery over 2 million units, SAIC 1.8 million to 2 million units, Geely 1 million units, Great Wall and Changan total 1.5 million units, GAC 500,000 units, New Force Brands 1.5 million units.

Total approximately 11 million units.

On May 15, during the 18th Xuanyuan Auto Blue Book Forum Overseas Special Session "China's Global Market Share Ceiling" Top Debate, Zheng Yun, Head of Automotive Business, Asia Region, Roland Berger, did one thing: sum up the publicly disclosed 2027 overseas sales targets of major Chinese car companies one by one.

He divided this number by the total accessible overseas market volume for Chinese car companies, deducting markets that cannot enter in the short term such as the US, Japan, South Korea, India, etc., arriving at 25.5%.

This number almost completely coincides with the "25% ceiling" hypothesis proposed by Zheng Yun previously based on historical research. He stated a fact tacitly known in the industry at the forum: "The industry has all felt this ceiling, but no one has said it explicitly."

Chinese automotive global expansion has already moved past the stage of simply competing on export numbers.

In the past few years, the presence of Chinese car companies in overseas markets has strengthened rapidly. In 2025, China's automobile exports reached 7.098 million units, a year-on-year increase of 21.1%, continuing to rank first globally. Entering 2026, this curve is still going up.

Data from CAAM shows that in the first quarter of this year, China's automobile exports reached 2.226 million units, a year-on-year increase of 56.7%, among which new energy vehicle exports were 954,000 units, a year-on-year increase of 1.2 times. By April of this year, data from CPCA showed that China's passenger car exports reached 769,000 units, a year-on-year increase of 80.7%, with new energy vehicles accounting for 52.7% of total exports, surpassing fuel vehicles for the first time.

But the more cars sold, the harder the subsequent questions become to bypass.

Chinese car companies have already secured nearly 70% share domestically. In April of this year, the domestic retail share of independent brands reached 69.6%, and the penetration rate of new energy vehicle retail also exceeded 60% for the first time. However, once overseas, the growth experience from domestic markets cannot be directly copied.

Price, configuration, intelligence, and supply chain efficiency can indeed help Chinese cars open up the situation first, but whether they can truly stay depends on local production, compliance, after-sales service, spare parts, brand recognition, and cultural integration.

This is also the reason why "China's Global Market Share Ceiling" has become a realistic issue.

In the past fuel vehicle era, when US, Japanese, and German car companies expanded in the global market, they often encountered an invisible boundary in overseas share. Today, Chinese automobiles are re-entering the global market with new energy, intelligent connectivity, and a complete industrial chain. Does this boundary still hold?

In response, Wei Haigang, General Manager of GAC International, believes that Chinese car companies going global cannot simply copy the domestic "King of Competition" strategy. GAC's job is to implement "For Local, In Local" around products, channels, brands, localization, service, and ecology, completing the transition from "Going Out" to "Walking In" to "Walking Up".

Yan Huofeng, Global Senior Vice President of Mingshi Group, believes that the real difficulty in building factories overseas is not equipment and capacity, but people, compliance, and social value. Only by becoming part of the local community can a company operate sustainably for the long term.

In the view of Zhou Lingkun, President of Linglong Tire, the global supply chain is not simply more open or more closed, but is differentiating: parts involving security, data, chips, and software will tighten, but mature performance parts like tires will instead see new windows.

Yang Hongwei, Founder and CEO of Shanghai Huayi Auto Connect Auto Technology, believes that Chinese automotive global expansion is still in the early stage. Many "Belt and Road" markets are not lacking purchase demand, but lack after-sales service, spare parts, and repair systems. Parallel exports and local service networks still have space to fill.

Zheng Yun finally brought the question back to a more realistic judgment. 25% is not a mysterious number, but a reminder: for Chinese automobiles to go up, we cannot just look at export volume, but also whether we can truly operate overseas.

Where does 25% come from

This claim of 25% did not come out of nowhere.

Zheng Yun and the Roland Berger team reviewed three stages of automotive globalization history: US in the 1950s, Japanese in the 1980s, and German around 2000.

A common phenomenon is that no matter how strong the technology or brand of these countries' car companies is, once their overseas market share approaches a certain level, growth will slow down.

Toyota is often used as a reference. In 2025, Toyota's sales in the US market were about 2.518 million units, with a market share of about 15.5%. This is a mature market operated for decades, but Toyota also did not long break through 20%.

In this sense, overseas markets are not just about having a strong enough product to increase volume indefinitely. Local industry, employment, politics, supply chain, and consumer mindsets will all form boundaries.

Yan Huofeng mentioned at the forum that after US, Japanese, and German car companies develop to a certain stage overseas, they will often consciously control their share.

She gave an example of Toyota in the US pickup market. The three most profitable in Detroit are full-size pickups. Toyota is not unable to make them, but it has long not done too much in this area.

Behind this is not a capability issue, but a business choice. If an external brand charges too hard in the host country's most core and most profitable market, it is easy to trigger local industry and policy backlash.

Chinese car companies have been used to addition in the past few years. Adding configuration, adding speed, adding capacity, adding market, adding stores. Domestic price wars and product iteration also make it difficult for enterprises to slow down.

But going global is not a simple extension of domestic competition.

Zheng Yun said that Chinese independent brands have already secured nearly 70% share domestically, which can be seen as a ticket to enter the global top table. The key lies in the fact that Japanese, Korean, and German companies are not only strong in their local markets but also operate long-term in overseas markets.

Chinese automobiles now need to answer whether they can tear open the boundary left by the fuel vehicle era with new energy, intelligence, supply chain, and product efficiency.

This question placed in 2026 has more realism.

Chinese car exports are still in high growth, but barriers in European and American markets are rising. The EU has already imposed additional anti-subsidy tariffs on Chinese-made EVs, with BYD, Geely, and SAIC facing different tax rates, and they are stacked on top of the 10% standard import tariff. The US maintains a 100% tariff on Chinese EVs. Tariffs are just the surface; behind them there are also data compliance, software restrictions, supply chain reviews, and local production requirements.

In other words, Chinese cars are not unsellable; rather, as more are sold, the rules become more complex.

This is exactly the meaning of this 25% question.

Exports are still pushing forward

From a data perspective, the speed of Chinese automotive global expansion is indeed fast. At the same time, the domestic market is obviously under pressure.

From January to April 2026, domestic automobile sales were 6.447 million units, a year-on-year decline of 20.6%. The proportion of exports in total sales has risen significantly.

The new energy structure is also changing.

Data from CPCA shows that in April 2026, the domestic retail penetration rate of new energy passenger cars exceeded 60% for the first time, reaching 61.4%. The domestic market has been reshaped by new energy, and overseas markets are also receiving Chinese new energy products.

The larger background is that global electrification is still advancing. IEA mentioned in "Global EV Outlook 2025" that global EV sales exceeded 17 million units in 2024, a year-on-year increase of over 25%, with China's sales exceeding 11 million units. Reuters cited research firm Rho Motion predicting that in 2025, global pure electric and plug-in hybrid sales will exceed 20 million units.

This provides new opportunities for Chinese car manufacturers.

In the past, Chinese car exports relied more on fuel vehicles and price-performance. Now, China has formed relatively strong industrial chain capabilities in batteries, electric drive, motor control, hybrid, smart cockpits, assisted driving, and complete vehicle manufacturing efficiency. For many emerging market consumers, Chinese cars are not only cheap but also have higher configuration.

Yang Hongwei mentioned at the forum that in the Belt and Road markets he deeply cultivates, the penetration rate of Chinese cars is still very low; some places are not even 5%, but local consumers like it very much. Even Addis Ababa, the capital of Ethiopia, saw a situation where Chinese new energy vehicles were hard to find.

Ethiopia is a very typical example. AP reported that Ethiopia became the first country in the world to ban the import of non-electric private vehicles in 2024, but it is also facing problems with charging, maintenance, parts, and used car residual value. This case shows that emerging markets indeed have demand, but behind the demand follows a whole set of service issues.

This is also the reason Yang Hongwei repeatedly emphasized after-sales and parts.

Huayi Auto Connect where he works is positioned as an automotive global cooperation partner, mainly serving some markets that manufacturers temporarily cannot care for. He mentioned, the company exports about 15,000 to 16,000 cars annually, mainly flowing to Belt and Road countries, while building warehouses locally and incubating repair shops, many of which are husband-and-wife shops.

In these markets, whether parts arrive after cars are sold and whether maintenance can keep up is often more important than brand launch events.

This is different from the tactics familiar to Chinese car manufacturers domestically. Domestically, after a new car launch, it can quickly pull sales through dense channels, OTA, social media, and pricing strategies. But overseas, whether a city has a spare parts warehouse, whether a technician knows how to repair, or whether a user can get parts quickly after an accident will all affect brand reputation.

Therefore, the better the export data, the greater the pressure behind it.

Advantages cannot be copied directly

What Chinese car manufacturers can most easily bring out is price and product configuration. What they cannot directly bring out at all is the intelligence that has been hottest domestically in recent years.

Wei Haigang proposed at the forum that Chinese automobiles are forming two markets.

Domestic intelligent connectivity development is fast; some cars have reached L2++, even emphasizing city NOA, all-road intelligent driving. But overseas, in many markets, reaching L2+, Highway NOA plus parking is already considered advanced.

The reason is simple. City intelligent driving needs local road data, maps, regulations, network infrastructure, and user scenarios. Different countries have different data compliance requirements, road structures, and traffic habits. Intelligent driving capabilities that run well in the Chinese market cannot be directly copied overseas.

Wei Haigang said, if Chinese automobiles take off alone, making cars that fit domestic markets but detach from international markets, it will form two markets. For car companies, this is not a technical slogan, but a product definition issue.

Yang Hongwei's front-line observation is more specific.

He mentioned that Chinese new energy vehicles went out too fast. Many content inside domestic car machine screens, when overseas except for the vehicle itself functions, might be a burden. In some countries he deeply cultivates, local users may not care about LiDAR, millimeter-wave radar, or complex smart cockpit functions, but are more concerned about whether white robes can hang in the car or slippers can be put inside.

His judgment is: local users care more about whether your intelligence respects me.

Many things Chinese car manufacturers fought out domestically are not necessarily advantages overseas. Large screens are not needed by every market; intelligent driving cannot be used in every country; high configuration is not necessarily more moving than localization details.

This is also the reason Wei Haigang emphasized stratification and classification.

He believes that Chinese automobiles leveraged overseas markets early on with price-performance; in recent years, more with new car concepts, including intelligent connectivity, new energy, car design, and scenario definition.

But when going overseas, not every country wants you to have strong intelligence and electrification. Some countries have weak energy facilities; some countries have insufficient network conditions. Overseas markets must be layered.

GAC's approach is also pragmatic. Introducing products that meet local needs according to different overseas markets, while adopting因地制宜 overseas factory building models, investing and building KD factories in countries like Thailand, and adopting cooperative ODM modes in some countries.

This is not the most radical approach, but it fits the rhythm Wei Haigang spoke of. Different countries choose different entry methods; not rushing to fit one model to all markets.

Zhou Lingkun then added another layer of change from the supply chain perspective.

He believes that the global supply chain is not simply more open or more closed, but is differentiating. Parts involving security, privacy, data, chips, software, and three-electric systems will increasingly emphasize sovereignty and controllability in the future. National sovereignty will manifest through data compliance and supply chain security; walls in relevant fields will get higher.

But mature performance components like tires are different. They have both matching and aftermarket, and retail market size is large. Linglong has achieved supply for 8 of the top 10 global car manufacturers, with opportunities for further breakthroughs in the future.

What Zhou Lingkun means is that Chinese supply chains cannot only look at complete vehicle exports. The more mature, standardized, and able to reflect cost and manufacturing efficiency parts, the more opportunities they might get overseas.

New energy tires are an example. Pure electric vehicles are heavier than fuel vehicles, proposing higher requirements for load bearing, rolling resistance, and noise. After the engine is gone, vehicle interior noise comes more from road and wind noise, and the importance of tires increases. If tires have built-in sensors in the future, they can also transmit temperature, pressure, and ground status back to the complete vehicle system.

This shows that Chinese automotive global expansion is not just one company's business. Complete vehicles, parts, after-sales, logistics, maintenance, finance, software, and data will all connect together in the end.

Localization requires tuition fees

If intelligence tests product adaptation, localization tests organizational capability.

The Mingshi experience provided by Yan Huofeng offers another perspective: the real threshold of globalization is not technology, but people.

Mingshi first went to the US to buy a factory in 2007, and sequentially built factories in Mexico, Thailand, and Germany in 2012 and 2013. She said, in the first ten years, in the first 5 to 6 years after every overseas factory was established, it was basically headstrong and bloody, paying a high price. Until 2017, Mingshi overseas factories achieved comprehensive profitability.

But after 2017, the situation changed. Mingshi continued to expand in Serbia, France, UK, Poland, Czech Republic, Tennessee, USA, Canada, etc. New factories can even achieve profitability in the second year of mass production.

Yan Huofeng summarized the experience into three keywords: People, Compliance, Social Value.

Among them, the hardest is People.

She mentioned, in the early stage of overseas factories, the general manager must be dispatched by headquarters, and must undergo systematic training, having global project, factory management, or overseas factory work experience, and also possess language ability. For middle and team leader positions, Mingshi adopts a dual-post system, one person dispatched from headquarters, one local person, slowly cultivating local people. Once the local team matures, headquarters personnel go to the next place to build a factory.

Now, Mingshi overseas factory employee localization rate is roughly 50% to 70%.

Compliance is the bottom line; social value determines whether one can truly integrate.

Yan Huofeng gave an example of Serbia. Mingshi hosts one to two China-Serbia youth cultural exchanges annually, inviting local junior high, high school, and college students to visit China; expenses are borne by Mingshi. Candidates come from employee recommendations, school recommendations, government recommendations, or recommendations by influential figures in the local community.

She believes this method is more useful than writing CSR numbers in annual reports. Because employees' families and communities will truly feel that this enterprise is not just here to build a factory, but willing to engage with the locals.

This is different from the localization many car manufacturers are just starting.

Chinese car manufacturers have significantly increased overseas factory building actions in recent years, but shifting from export to production is only the first step. The real difficulty is local recruitment, local suppliers, local regulations, local unions, local service, and local social relations.

This is also the background for Wei Haigang mentioning borrowing ships to go out. Heavy asset factory building suits large-scale overseas markets, but in many countries and regions, entering the market first through cooperation, ODM, KD assembly, regional warehouses, and channel construction may be more stable than directly building complete factories.

However, looking long term, localization is inescapable.

Toyota, Hyundai, Kia, Volkswagen, and these car companies' global shares are not made solely through exports, but through overseas production, local procurement, local sales, and local employment. China is still a structure heavy on exports, light on overseas production. Japanese car companies have roughly formed a structure of 4 million exported, 17 million overseas produced, while China is still in a state of over 7 million exported and overseas production just starting.

This is also a lesson Chinese car manufacturers must make up in the next few years.

Exports can be fast; localization is slow. Exports look at sales; localization looks at patience.

After-sales is also business

In this roundtable, Yang Hongwei provided an easily overlooked angle: Used cars and after-sales.

He believes that Chinese automotive global expansion is still in a very early stage. Even if exported millions of units, penetration rates in many markets are still very low. What truly decides whether a brand can stay is not just how many new cars are sold, but whether they can be repaired after being sold, whether parts are available, and whether used car residual value can be formed.

He mentioned that the US and Japan export a considerable scale of used cars annually. Chinese new energy vehicle production and sales rise year by year; where these cars flow in the future will also become an issue. If China can build up used car exports in the future, there is an opportunity for over 2 million units annually.

This judgment currently needs more industry data verification, but the direction is worth noting.

Chinese cars previously discussed new car exports more, but rarely discussed existing car service. When overseas users buy a Chinese car, if it cannot be sold after three years, maintenance prices are high, and parts cycles are long, brand reputation will be affected.

In emerging markets, after-sales is even more important than advertising.

Yang Hongwei mentioned, in markets like Ethiopia, consumers find it hard to repair after buying cars, manufacturers can't care for it, and consumers cannot buy parts. They need to air freight parts from Guangzhou. Setting up warehouses in some places may not be cost-effective; even air freight from China is more convenient than adjusting goods from transshipment points.

These details sound trivial, but they are the real cost of going out.

Chinese car manufacturers in the past formed strong new car launch capabilities, supply chain response capabilities, and marketing capabilities domestically, but overseas markets test a different system. Whether there are regional parts warehouses, local technicians, repair training, financial services, residual value systems, or insurance cooperation, all these determine whether users will buy a second car.

Zheng Yun also mentioned at the roundtable that when Chinese automobiles discuss going global today, we cannot just look at the share of complete vehicle brands, but also how companies like Mingshi and Huayi embed into the global automotive industry. In other words, going global is not just the battlefield of complete vehicle factories.

This can also be linked with what Zhou Lingkun said about ecology.

If Chinese car manufacturers only export complete vehicles, once share growth reaches a certain level, it is easy to encounter tariffs and localization requirements. But if complete vehicles, parts, maintenance, logistics, finance, used cars, software, and services go out together, overseas markets will not see just external products, but a whole set of industrial capabilities.

Of course, this capability is harder to do. It needs time, and also enterprises need to have less short-term volume mentality.

Don't just count sales volume

Back to Zheng Yun's addition problem.

Wei Haigang believes that the rapid growth of Chinese new energy vehicles domestically has proven that many past judgments will be rewritten. In previous years, industry predictions for new energy penetration rates were far lower than actual results; now many consumers, after using EVs, cannot return.

Looking at the global market, if overseas energy environments, oil price changes, and industrial chain construction continue to advance, Chinese new energy vehicles still have opportunities.

But he also admits that 25%'s realistic restrictions exist. Markets like the US, Japan, South Korea, India are hard to enter in the short term; the markets truly accessible to Chinese car companies are limited. Whether remaining markets can make up enough share depends on product adaptation, localization, compliance, and service.

Yan Huofeng's answer emphasizes long-term operation more.

She believes 25% or 25.5% is not impossible to reach, but whether it can be maintained or even broken through long-term depends on whether Chinese OEMs consider sustainable development truly when going global. When reaching every place, whether they are operating locally, integrating into local culture, and digging deep into brands, these are very key.

She mentioned that Chinese OEMs need to use the mindset of global companies to do a global win-win cause. This win-win is not just between supply chains, but a win-win of all stakeholders.

Zhou Lingkun then reminded that the 25% historical experience of the past still has reference significance, but three premises have changed today.

First, the number of Chinese companies going global is far more than US, Japanese, and German companies of that time. It is not three companies covering the world, but a batch of enterprises and many service providers going out together.

Second, the power type has changed. The past 25% happened in the fuel vehicle era; this time it is the industrial chain changes brought by new energy and intelligence.

Third, production efficiency might have changed. If AI and intelligent manufacturing continue to develop, the original production organization methods will be rewritten.

But Zhou Lingkun didn't put it all out. He believes the Chinese automotive industry needs to answer, not just products and technology, but also what kind of business civilization is output. Besides products, technology, and employment, what else Chinese enterprises take out, this is a very meaningful question.

This sentence sounds a bit grand, but landing in enterprise actions, it is actually not complex.

If an enterprise goes overseas just to grab share, hit prices, and suppress suppliers, it is easy to trigger local resentment. If it can bring employment, training, supply chain opportunities, service capabilities, and long-term investment, the local market's acceptance of it will be different.

Yang Hongwei's judgment is the most optimistic. He believes the 25% ceiling is data from past traditional cars. For today's new cars, changes brought by intelligent connectivity, software, and new energy cannot be simply judged by past thinking.

But even so, the point he said is not relying only on sales, but after-sales supply chain and localization.

What this discussion finally left behind is not a certain answer. Whether 25% can be broken through, no one can give a final conclusion. But what can be determined is that Chinese automotive global expansion has passed the stage of just looking at export volume. Next, the questions enterprises need to answer will be more detailed and more difficult.

Whether a car can be sold is still the first step.

After selling, whether it can be repaired, whether parts can arrive, whether intelligence can adapt, whether factories can localize, whether employees can localize, whether brands can be trusted by local users, are the longer exam questions.

Chinese car manufacturers in the past were good at addition. Going to overseas markets, they may need to start learning another thing. Which functions should be kept, which configurations should be reduced, which markets should be done deeply, which boundaries cannot be forced, which local partners must be respected, which long-term investments cannot be saved.

How high the 25% wall is in the end depends not only on how many cars Chinese car companies can make, but also on how many Chinese cars overseas markets are willing to keep.