"If you only solve market problems in overseas operations, that is merely 'basic level'."
Zhao Fuquan, Vice Chairman of the Global Automotive Elite Organization, Honorary President for Life of FISITA, and Dean of the Institute of Automotive Industry & Technology Strategy at Tsinghua University, stated this at the 2026 Global Chinese Automotive Elites Annual Conference and the "China Embraces the World" International Development Forum for the Automotive Industry.
China's total annual automotive exports in 2026 are expected to exceed 11 million units and may even challenge 12 million. However, compared to export figures, issues such as tariffs, geopolitics, after-sales service, and talent are more worthy of attention. In Zhao Fuquan's view, the key for Chinese enterprises to succeed overseas lies in building global companies suited to the new era of automobiles.
The Old Logic Hits a Ceiling: How Far Can "Made in China, Sold Overseas" Go?
The surge in Chinese automotive exports has been one of the most prominent industry changes over the past five years. At this forum, Xu Haidong, Deputy Chief Engineer of the China Association of Automobile Manufacturers (CAAM), reviewed the export data over these years. In 2020, China's automobile exports were only 995,000 units. From 2021 to 2023, they successively crossed the thresholds of 2 million, 3 million, and 4 million units, reaching 7.09 million last year. This year, full-year exports are expected to exceed 11 million units.
Changes in the domestic market have increased the weight of overseas sales. CAAM data shows that in the first three quarters of this year, domestic automobile sales fell by approximately 22% year-on-year, while exports grew by about 66% year-on-year. The overseas market is no longer an optional supplement but a critical pillar supporting the sustained operation of the industry.
While these achievements are impressive, Zhao Fuquan believes that equating going global with simply selling more cars in overseas markets still remains at the "basic level."
He cited a set of data. Global passenger vehicle sales are approximately 75 million units per year. The Chinese market accounts for about 20 million units, and the US market accounts for about 15 million units, where Chinese brands are largely excluded. Excluding these two segments, the remaining markets accessible to Chinese automakers amount to only about 40 million units, yet current annual deployment already exceeds 10 million units.
The problem also lies in the trade model. For some enterprises, cars are sold abroad, but the industry and jobs do not follow. If local residents do not see increased employment as a result, resistance arises. Relying solely on trade to drive growth is unsustainable.
Moreover, barriers are tightening in the order of "tariffs, quotas, and localization rates."
Xu Haidong provided export data to Europe, which illustrates the direct context of tightening barriers. In 2024, China exported approximately 100,000 pure electric vehicles to the EU. In 2025, this figure was about 300,000. In the first eight months of this year, it reached 490,000, with full-year estimates around 800,000.
After the implementation of EU anti-subsidy tariffs, the additional tax rates faced by different companies vary significantly. Xu Haidong revealed that the highest tier of anti-subsidy tariff reached 45%. Combined with the 10% basic tariff, the comprehensive tax burden for some companies exceeded 50%, and plug-in hybrid models were also included in volume commitment negotiations.
Zhao Fuquan stated bluntly, "Today it is tariffs, then quotas begin, followed by localization requirements—it squeezes you tighter step by step."
More troublesome are the invisible long-tail issues. In some markets, customs clearance for parts takes a very long time. "It is not that approval is denied, but rather delayed—and delay is the best form of denial."
If accessories cannot enter, maintenance cannot keep up. New energy vehicles also face gaps in insurance products and insufficient residual value management. Each of these factors is enough to offset the cost-performance advantage on the front end.
He also warned that quality issues with some Chinese vehicles have already caused negative impacts overseas. The cooperation window left for Chinese enterprises is shorter than imagined. Local enterprises are currently willing to cooperate, but this may not be the case in a few years.
Changes in the Southeast Asian market are equally alarming. Zhao Fuquan revealed that price wars have already begun there, involution is spreading, and Southeast Asia is becoming a highly competitive market.
He stated directly, "For enterprises lacking competitiveness domestically, seeking blue oceans overseas is basically suicide."
These issues point to the same fact: the path of driving volume through trade has narrowed. To establish a long-term presence overseas, Chinese automakers need a new approach, and the pathway for this new approach is precisely to build global companies suited to the new era of automobiles.
A New Yardstick Is Established: Redefining the "Global Company" in the New Era of Automobiles
Zhao Fuquan does not recommend that Chinese enterprises copy the paths of traditional multinational corporations. It should be noted that foreign brands that once flourished in the Chinese market are now retreating; models that were previously hard to obtain are difficult to sell even with price cuts.
His assessment is that "old globalization practices mean putting new wine into old bottles." The world, the industry, and the landscape have all changed. What Chinese enterprises seek are new models adapted to the new automotive industry.
Moving from trade exports to localized operations, and then to globalized operations, represents the three stages typically experienced by enterprises going global. These three stages are not mutually exclusive. Even in the stage of globalized operations, trade still exists. High-end Western brands still produce many models locally and sell them globally.
Localization itself also has levels. Zhao Fuquan pointed out that production localization is only the "basic level." Supply chain localization and regional product adaptation remain in the primary stage. Even deepening localized operations is not enough; the direction must be global integrated operations.
He believes that a global company should manage its global business as a whole, using group strategy to coordinate common capabilities, regional authorization to maintain local flexibility, unified investment for multi-market reuse, and continuous expansion of global brand influence and long-term corporate value.
This means resources must be shared globally, headquarters must collaborate with overseas entities, different overseas regions must collaborate with each other, and links such as R&D, procurement, production, sales, and service must also be interconnected.
He also discussed four layers of globalized operations. The strategic layer sets the direction; the capability layer relies on reusable product platforms to reduce costs; the operational layer maintains a global perspective while leaving sufficient space for regions; and the safeguard layer provides support through organization, culture, and systems. He noted that this is an open-book exam—if you fail to meet the standards, you cannot succeed.
In terms of specific operations, he believes two sets of relationships are the most difficult to handle.
One set involves headquarters control versus regional delegation. Insufficient delegation leaves overseas operations without flexibility. Excessive delegation leads to risks such as loss of operational control and leakage of intellectual property.
The other set involves global technology platforms versus regional products and regulations. Developing products separately for each small market makes it impossible to recoup costs with limited sales volumes. A feasible approach is to rely on platforms that can be reused across regions, and then differentiate based on regional regulations and user preferences.
Localization is particularly valued in this era due to changes in the automobile itself. Zhao Fuquan judges that new automobiles are becoming "local ration coupons."
Traditional automobile localization addressed logistics, time, cost, and labor issues. Future automobiles are based on data, scenarios, and ecosystems. Data is local, ecosystems are local, and scenarios are local.
Against the backdrop of security priorities and reshaping geopolitical landscapes, localization is no longer a choice between costs.
Beyond this lies the competition of brands, corporate citizenship, and corporate culture.
Zhao Fuquan proposed that measuring a global company should not look only at sales volume, but more importantly at whether global resources are coordinated, whether technology platforms can be reused across regions, whether regions can achieve autonomous profitability, whether innovation flows back bidirectionally, and whether the brand possesses global leadership.
He specifically explained the term "corporate citizen." Citizens have national boundaries; when operating locally, enterprises must respect the rules of the host country and fulfill responsibilities like citizens.
The industry saying "from going out to integrating in" refers to this layer. Entering a country's market only crosses geographical distance; becoming part of the local industrial ecosystem and social system is what constitutes truly standing firm.
New Joint Ventures Break Through: Grasping the Rhythm of the Three Stages of Going Global
Zhao Fuquan believes that joint ventures are an underestimated card in the hands of Chinese automakers. Over the past forty-plus years, joint ventures were the path for foreign capital entering China. In the new phase of going global, this card can be played in reverse. He calls it "New Joint Venture," and others call it "Reverse Joint Venture."
Early joint ventures were constrained by equal shareholding. The equity arrangements for new joint ventures are much more flexible; they can involve controlling stakes or minority interests. Overseas, the foreign partner can even hold the controlling stake.
He mentioned a case study. In a joint venture between a Chinese automaker and a French enterprise, the foreign side held 51% and the Chinese side held 49%. At the time, some questioned whether the Chinese side was giving up control. However, in his view, since the foreign side controls local channels and resources, allowing them to hold more shares, bear more responsibility, do more work, and earn more profits—following the principle that people act for profit—makes it easier for products to open up the market.
The essence is deep binding of interests.
For different markets, he suggested handling them by quadrant based on the localization support provided by foreign partners and the height of market barriers.
In markets with high barriers and mature foreign foundations, one can "borrow ships to go to sea," leveraging partner resources to enter quickly. This offers the fastest speed, lowest cost, and smallest risk, with the difficulty lying in how to share benefits. Other markets are suitable for joint development.
A single template does not work everywhere; the key is to look at market conditions.
Regarding rhythm, he advocates "Consolidate 1.0, Prepare 2.0, Strive for 3.0."
Stage 1.0 focuses on solidifying the fundamentals of quality and service. Once brand reputation is damaged by quality issues, it is difficult to recover. Stage 2.0 involves deep cultivation in key regions, focusing on regional resource linkage rather than single-point sales volume. Stage 3.0 achieves global integrated linkage.
In his speech, Xu Haidong mentioned two shortcomings in the process of going global that must be addressed.
First is the export of management models. He stated that relying on overtime work domestically and demanding overtime from employees in Europe "will not work." Getting Europeans to accept Chinese-style management depends not on the system itself, but on the corporate values behind the system. If values are not established, systems cannot be implemented.
Second is the gap in international talent. Xu Haidong stated that international talent is not just about wearing suits and tasting wine; the key is leadership—moving local employees with personality and values, rather than saying "I pay your salary, so you must listen to me."
He also offered a perspective for judging international maturity: if headquarters ceased to exist, could global business continue to operate normally? The overseas system cannot rely solely on remote control from headquarters; it requires localized operational and decision-making capabilities. This is exactly the lesson most enterprises are still learning.
Scale thresholds are also rising. Zhao Fuquan quoted a set of industry judgments from an executive: 3 million units is the survival threshold, 5 million units allows one to "barely survive," and 10 million units is considered living relatively well. Companies with a scale of20 million units may emerge in the future. Zhao Fuquan believes such companies must be ecosystem-based, relying on multi-brand, multi-market, and diverse business model synergies, rather than simple accumulation of sales volume.
Xu Haidong's judgment is that among the top ten global automakers by sales volume, three are already Chinese enterprises, and during the "15th Five-Year Plan" period, this number may rise to five or six.
He also stated that telling China's story well and projecting China's image effectively, automobiles are important carriers. Every car sold will be used for ten years. The owner, their children, and their relatives will grow alongside it. When vehicles run on foreign soil, they represent China. Every car carries Made in China, Chinese Quality, and Chinese Service, reflecting China's story, image, and soft power behind it. As he put it, "It is different from home appliances, clothing, shoes, and hats; in the future, it represents China."
While the achievements in Chinese automotive exports are indeed inspiring, at such junctures, calmness is more important than excitement.
Capturing cities is not easy; defending them is harder. Being a global company is both an opportunity to capture cities and a pillar to defend them.
Beyond ten million units, what Chinese automobiles compete on is no longer who is bolder, but whose system is more solid. Only by rooting locally and achieving collaborative profitability can we step by step move towards becoming an industrial powerhouse.