(CN) — China eclipsed the United States as the European Union’s largest consumer of vehicle products in 2022, according to macroeconomic data analyzed as part of a report released by Eurostat on Wednesday.
The Chinese market now accounts for 21% of EU vehicle products produced for export, nearly doubling its 12% share of so-called domestic value added since 2010 and surpassing the 20% value exported to the U.S. in 2022. The term value added is the amount by which the value of a product is increased at each stage of production, not including initial costs.
The EU’s third largest partner for the export automotive industry was the United Kingdom, with a 13% share. Together, the three account for 54% of the EU’s vehicle products export market.
But the new data indicate that as trading partners, the value added of both the United States and United Kingdom has fallen since 2015, while that of China has risen from third place to first. The total value of exported vehicle products was around 78.9 billion euros (about $83.2 billion at press time), which represents a 54% increase from 2010 but a 7% decline since 2015.
China also became the largest single producer of vehicle products manufactured for import to the EU in 2022, capturing 16% of the value added. Japan represented the second largest partnership with a 15% share while South Korea produced a 10% share.
“China has emerged as a key player in the automotive industry, not only as a significant importer of EU vehicles but also as a crucial supplier of inputs required by the EU automotive sector for its exports,” the report noted.
In recent months, both the EU and the United States have proposed adding new tariffs on Chinese automotive products in an effort to support domestic production.
The value of vehicle products generated by other countries for import to the EU reached 34.6 billion euros ($36.4 billion) in 2022, an increase of 124% since 2010 which “[suggests] a higher dependence on external providers.”
The automotive industry as a whole produced a value added of 237 billion euros ($249.7 billion) in 2022, about 1.7% of the EU’s total according to additional data. Germany itself produced more than half that value, or 144.2 billion euros ($152 billion). German manufacturers include Volkswagen, BMW, Audi and Mercedes-Benz.
The next largest contributors include Spain, Italy, France, Sweden and Czechia. Spain hosts manufacturers including Ford, Stellantis, Renault, Volkswagen and Mercedes-Benz.
The value of automotive products exported from the EU was more than double the value of products imported, resulting in a trade surplus of 124.5 billion euros ($131.2 billion). But the growing imbalance with China leaves the EU increasingly exposed to trade disruptions, while similar risks with the United States have been relatively stable since 2017.
“From the EU’s perspective, the value added from the automotive industry reveals a significant growth in reverse exposure with China in recent years,” the report states. “This growth indicates the rapid integration of the Chinese automotive industry not only in the EU’s final use but also in a third country’s final use through EU production, as well as its expansion through a third country’s production in the EU’s final use.”
Finally, the report revealed the EU’s import/export automotive industry accounted for approximately 806,000 jobs in 2022, which is a decline from its peak of 918,000 in 2014, but a number still supporting 33% of the 2.4 million people working in the EU automotive industry.