Last year Mazda announced a USD1.4 billion (CNY 10 billion) investment in its JV with Changan to double production capacity, mainly for export, with a target of USD1.4 billion (CNY 10 billion) in annual export value.
Around the same time, Nissan unveiled its own USD1.4 billion (CNY 10 billion) investment in China, even as it closes plants elsewhere, including in Japan. The plan centres on restructuring JVs to produce in China for export, excluding the US. Nissan also formed a new JV with long-time partner Dongfeng Motor, committing USD140 million to export cars and parts.
For years, exporting from China held little appeal for foreign OEMs. JV structures meant sharing profits with state-owned partners, while strong domestic sales kept capacity fully utilised. Now, idle plants, lower production costs, a depreciating yuan, and VAT rebates have made the China-for-export model far more attractive.
The ability to take majority stakes in JVs adds to the appeal. BMW has done so with Brilliance Auto, and Nissan has taken a majority stake in its new export-focused JV with Dongfeng. But such moves remain difficult where SOE partners resist.
But the strategy has limits. More countries are erecting trade and market-access barriers to Chinese car exports. Ford and GM once shipped vehicles from China to the US, but new tariffs have rendered those unprofitable.
Mexico which accounted for a quarter of Kia and Ford’s 2025 sales from China and a full 64% of GM’s which is reportedly also considering tariff hikes later this year. Internal pushback is another risk: Headquarters of firms, especially those with powerful works councils or labor unions, may resist China exports if they threaten jobs at home.
And given the scale of idle capacity in China, exports alone are unlikely to fill the gap meaning OEMs may need to pair this approach with renewed local investment, to also reverse market share losses domestically, or further asset sales.
