[Correspondent Diary] Japan Cars Are the Biggest Beneficiaries of US-China Conflict

US Market Share Approaches 30%... American Cars Plummet 5.8 Percentage Points During Trump Administration
Korean Brands Decline Sharply Every Year Since THAAD, Presence Disappears

[Asia Economy Beijing=Special Correspondent Jo Young-shin] The Chinese state-run People's Daily recently published an article on the front page about last year's automobile production and sales status in China. The core of the article is that despite the COVID-19 pandemic situation, the Chinese automobile industry operated normally.

In fact, last year, China's automobile production and domestic sales volumes were 25.22 million and 25.31 million units respectively, showing only a 2.0% and 1.9% decrease compared to the previous year. The People's Daily explained that due to COVID-19 control measures, the Chinese automobile industry experienced nine consecutive months of growth from April last year, and seven consecutive months of double-digit growth starting in June. Citing experts, the People's Daily reported that 25.31 million units account for 33% of global automobile sales. It also forecasted that this year, China's automobile sales will exceed 26 million units.

Given that China is the world's largest automobile market, 25.31 million units is not a surprising figure. However, an interesting phenomenon appears when looking at sales volumes by country brand.

[Image source=AP Yonhap News]

According to the China Association of Automobile Manufacturers and market research firm WIND, from January to November last year, the total sales volume of American brands in China was 1.67 million units. The market share was 10.9% (monthly average). When Donald Trump took office as U.S. President in 2017, the market share of American brands was 16.7%. As the U.S.-China trade dispute began, the share dropped annually to 14.9% in 2018, 11.6% in 2019, and 10.9% in 2020. During President Trump's term, the market share plummeted by 5.8 percentage points. Given the deterioration of relations to the extent that the term "new Cold War" emerged, this outcome was inevitable.

The U.S.-China conflict's spillover benefits were reaped by Japan, a U.S. ally. Last year, Japanese brand sales reached 4.134 million units. The market share of Japanese brands, which was 22.7% in 2017, surged to 29.7% last year. Including December sales, Japanese car market share is likely to enter the 30% range for the first time ever. The only other national brand to have crossed the 30% market share barrier in China is Germany. This is why Japan is considered the biggest beneficiary of the U.S.-China conflict in the Chinese automobile market.

Although the Chinese leadership praises South Korea as its largest economic partner, Korean brands are thoroughly ignored by Chinese consumers. Last year, the market share of Korean brands (Hyundai and Kia Motors) was 4.2%. This is a 1.3 percentage point drop from 5.5% the previous year and a 2.3 percentage point decline compared to 2017.

Since the THAAD (Terminal High Altitude Area Defense) deployment issue arose in 2017, the market share of Korean brands, which once soared to 12%, has plummeted year by year?9.4% in 2016, 6.5% in 2017, 5.8% in 2018, 5.5% in 2019, and 4.2% in 2020?losing even its presence.

This content was produced with the assistance of AI translation services.