Panorama of China's Auto KD Export in 2026: Knock-Down Assembly Exceeds 1 Million Units, Globalization Enters Deep Water of Localization

In 2026, China's automobile industry has entered a critical transition period of globalization. Against the backdrop of rising global trade barriers and tariff costs, KD (Knock-Down) has become the mainstream model for Chinese automakers' overseas expansion, with a rapid expansion of overseas localized assembly scale. The total KD export and overseas assembly volume is expected to exceed 1.1 million units for the whole year, a year-on-year increase of over 30%, marking China's automobile industry's shift from "product export" to "industrial export".

1. Current Status: KD Becomes Main Channel for Overseas Expansion, Scale Rises Rapidly

Since the start of 2026, mainstream automakers including BYD, Chery, Great Wall Motors, GAC, Dongfeng Motor and FAW Jiefang have intensively launched KD projects, covering five major regions: Europe, ASEAN, Latin America, the Middle East and Africa.

• European Market: Centered on Hungary, Turkey and Spain, KD production runs in parallel with full-process manufacturing to avoid high tariffs;
• ASEAN Market: Thailand, Indonesia, Vietnam and Cambodia have become KD hubs, radiating Australia, New Zealand and South Asia;
• Latin American Market: Rapid volume growth in Mexico, Brazil and Chile, accessing the North American market relying on regional free trade agreements;
• Africa & Middle East: Egypt, South Africa, Nigeria and other countries have become key KD bases for commercial vehicles and economy passenger vehicles.

Data from the China Passenger Car Association (CPCA) and industry institutions show that the total volume of China's overseas localized production (including KD assembly) will exceed 1 million units in 2026, among which KD parts assembly accounts for over 85%, becoming a core measure to hedge trade risks, reduce logistics costs and improve delivery efficiency.

2. Structural Features: NEV-Dominated, Passenger & Commercial Vehicles in Parallel

• Continuous Growth of NEV ProportionNEVs account for nearly 45% of the total KD export volume in 2026. Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs) have become the main force in high-end markets of Europe and ASEAN, effectively adapting to local carbon emission policies.
• Steady Growth of Commercial Vehicle KDHeavy-duty trucks, light-duty trucks and buses are in strong demand in mining and infrastructure markets in the Middle East, Africa and Southeast Asia. KD projects of commercial vehicle manufacturers such as Qingling Motors and FAW Jiefang have been launched in batches.
• Model UpgradeThe industry has gradually shifted from pure CKD (Complete Knock Down) to SKD (Semi-Knock Down) combined with localized supply chains. The local parts procurement ratio of some factories has reached 30%–50% in 2026.

3. Key Projects & Market Performance

• BYD's Hungary plant started mass production in Q2 2026, supplying the European market via KD + local assembly mode with an initial annual capacity of 150,000 units;
• Chery's KD bases in Mexico, Brazil and Turkey work in synergy, with an overseas assembly capacity of 350,000 units in 2026;
• GAC's Cambodia KD plant, Dongfeng Fengxing's Egypt KD plant and FAW Jiefang's Indonesia KD plant have successively gone into production, filling regional gaps;
• ASEAN has become the largest regional market for KD, with the local market share of Chinese brand NEVs exceeding 78%.

4. Trend Forecast: KD to Maintain High Growth in 2026–2027

1. Scale ForecastThe overseas assembly volume corresponding to China's auto KD parts export will reach 1.1–1.2 million units in 2026; it is expected to hit 1.5 million units in 2027, with the proportion in total overseas sales rising to over 15%.
2. Market Pattern

• Europe: High-end NEV KD + localized manufacturing in parallel;
• ASEAN: Consolidated status as the right-hand drive KD hub;
• Latin America: Mexico serves as a springboard to the North American market;
• Africa & Middle East: Sustained volume growth of commercial vehicles and economy passenger vehicles.

3. Risks & CountermeasuresTariffs, certification and geopolitics remain major challenges. Full-chain KD + technology export + local compliance will become the industry standard.

2026 is a model transition year for China's automobile globalization. KD is no longer a transitional solution, but a core component of the globalization strategy. With the coordinated export of supply chains and synchronous output of standards and technologies, Chinese automakers are moving from "selling cars globally" to "building cars globally", steadily advancing to the mid-to-high end of the global value chain.