Overseas expansion has become a significant growth driver for Chinese automotive brands, propelled by their advantages in cost-effectiveness and new product categories, according to a research report.

Gf Securities Co.,Ltd. suggests that the "electric-first, fuel-supplemented" new product categories from Chinese brands could accelerate the global automotive electrification process, further boosting the penetration rate of new energy vehicles worldwide.

In this new competitive landscape, the combined strengths of "value for money" and "innovative product types" are poised to drive a sustained increase in the global market share of Chinese brands.

The gradual market consensus on this trend is expected to become a crucial source of investment returns in the next phase.

Key Analysis Points

Leveraging their "value for money" and "new category" advantages, Chinese brands are evolving from simple product exports to a more comprehensive "industrial chain expansion" overseas. Against this backdrop, how to value the growth potential in overseas markets is becoming a central issue for the automotive industry.

European Market (Excluding Russia)

Europe (excluding Russia) is the largest export market for Chinese brands. This market has largely entered a mature stage with an annual volume of 15-16 million vehicles and a multi-polar competitive structure, representing the largest and most valuable accessible market for Chinese automakers.

Using new energy vehicles as their entry point, Chinese brands increased their market share to 7.2% in the first quarter of 2026, with notably higher shares in plug-in hybrid, pure electric, and hybrid vehicle segments at 24.5%, 12.2%, and 10.0% respectively.

By country, Chinese brands have achieved good penetration in relatively open markets like the UK, Italy, Spain, and Poland (with 6%–9% share), while they are in the early stages of breaking into traditional European strongholds like Germany and France (with 2%–3% share).

Relying on the deepening advantages of cost competitiveness, new product types, and localization, Chinese brands are projected to achieve a steady-state market share of 25% to 35% in Europe, translating to potential annual sales of 3.5 to 5.5 million vehicles.

Russian Market

Following the withdrawal of American, European, Japanese, and South Korean brands after the 2022 geopolitical events, Chinese brands filled the supply gap, capturing a 52.9% market share in the first quarter of 2026 in a market with a steady-state volume of about 1.5 to 1.8 million vehicles.

However, under the constraints of Russia's local protectionist policies, such as subsidies for domestic production and increased import disposal taxes, the brokerage expects the share of Chinese brands to stabilize rather than continue rising.

It is projected that Chinese automakers can maintain a steady-state share of 50% to 55% in Russia, corresponding to annual sales of approximately 800,000 to 900,000 vehicles.

Asian Market (Excluding Mainland China)

The accessible market in Asia, excluding mainland China, has seen rapid volume growth. The total market capacity is around 16 million vehicles.

However, markets like India, Japan, and South Korea, which together account for about 11 million vehicles, present significant short-term barriers to entry due to political access restrictions, market closure, and strong local brand loyalty.

Consequently, the effective accessible market for Chinese brands in 2025 is estimated at about 5.2 million vehicles.

In the accessible markets excluding these three countries, Chinese brands had already achieved a 14.8% market share in the first quarter of 2026, with rapid expansion led by electric vehicles and potential for continued growth in hybrid and plug-in hybrid segments.

The report suggests that future growth for Chinese brands will be concentrated in Southeast Asia, Turkey, and Central Asia. Good progress has already been made in markets like Thailand, Indonesia, and the Philippines, while significant potential remains in Turkey and Malaysia.

Overall, Chinese brands are expected to reach a steady-state share of 20% to 25% of the total Asian market, achieving sales of 3 to 4 million vehicles.

Risk Factors

Potential risks include a downturn in industry sentiment, a worsening inventory situation for passenger vehicles in overseas markets, intensifying competition, and the risk of increased tariffs.