Facing the ripple effects of an intensifying global tariff war driven by protectionist policies from the U.S., Europe, and other major economies, China’s automotive industry is shifting gears. Chinese carmakers are increasingly turning their attention to Russia and the Middle East in a strategic pivot to offset the impact and safeguard their global expansion.
Despite the storm of rising tariffs, China remains a dominant force in the global automotive sector—leading domestic car sales and aggressively expanding exports. A newly released report by Axios highlights just how robust the Chinese auto industry has become.
According to the report, China’s vehicle exports surged by 23% in 2024, reaching a total of 6.4 million passenger cars, surpassing Japan to become the world’s top vehicle exporter. Amid the growing tariff tensions, the direction of China’s automotive exports has notably shifted: Russia and the Middle East accounted for 35% of China’s total vehicle exports in 2024, overtaking shipments to Europe and North America for the first time.
Andrew Bergbaum, Global Automotive Practice Leader at AlixPartners, commented, “Chinese car sales to Russia and Belarus have more than doubled over the past five years. This growth has helped buffer China from the tariff-related volatility hitting major markets like the U.S. and Europe.”
Still, while Russia and the Middle East are gaining importance, the impact of the global tariff war is being felt. U.S.-led tariffs and those from other countries are expected to raise the cost of Chinese vehicle and auto part exports by roughly 24%, or about $46 billion, based on 2024 export data. A large portion of these added costs stems from U.S. tariffs.
Even so, the fallout from the tariff war is affecting only a relatively small portion of China’s overall automotive output. Export growth is expected to slow to 4% in 2025 as the tariff impact deepens.
Domestically, however, China’s auto market continues to show strength. Vehicle sales are projected to grow by 4% in 2025, reaching 26.8 million units, fueled by increasing demand for electric and hybrid vehicles and growing interest in assisted driving technologies.
By redirecting its focus, China is reinforcing its global automotive presence—even in the face of major geopolitical and economic headwinds. With Russia and the Middle East emerging as key export markets, China is adapting quickly to ensure the continued momentum of its automotive industry.
