Gasgoo Munich- Are Chinese auto parts suppliers actually making money overseas?
The answer is a resounding yes for many top-tier firms—and they are often earning more than they do at home.
As the global wave of electrification and intelligence accelerates, the role of Chinese supply chains is quietly shifting. In key sectors like power batteries, auto glass, and thermal management, companies are moving from followers to leaders. Leveraging technology and global layouts, top firms are securing real technology and brand premiums abroad. Overseas business has evolved from a "bonus" on financial statements into a true pillar of growth.
Yet, some have stumbled in their cross-border operations, paying a steep price for lessons learned.
Image source: 699pic
Is Overseas Business More Profitable?
An analysis of 2025 financial reports by Gasgoo reveals that for many parts suppliers, expanding overseas scale has gone hand-in-hand with rising profitability.
CATL performance stands out. In 2025, the battery giant generated 423.7 billion yuan in total revenue—up 17.04% year-on-year—while net profit attributable to shareholders jumped 42.28% to 72.2 billion yuan. Even more impressive is its overseas showing: international revenue accounted for 30.6% of the total with a gross margin of 31.44%, significantly higher than the 24% margin for domestic operations. This means overseas markets are delivering not just scale, but higher quality earnings.
Fuyao Glass overseas operations are also noteworthy. Total revenue rose 16.65% to 45.79 billion yuan in 2025, with net profit climbing 24.2% to 9.31 billion yuan. Overseas revenue hit 20.86 billion yuan—an 18.81% surge that outpaced domestic growth of 14.58%—bringing its international share to nearly 46%.
On margins, Fuyao overseas business reached 32.64%, up 1.18 percentage points. The boost was driven by strong North American demand for high-value products like smart panoramic sunroofs and HUD glass, alongside scaling efficiencies at its U.S. plants.
Minth Group ranks among the industry most internationalized players. Revenue grew 11.2% to 25.74 billion yuan in 2025, while net profit rose 16.1% to 2.69 billion yuan. Its international business share climbed to 63.5%, edging up from 59.7% in 2024.
Europe became its growth engine, surging 40.4% year-on-year. Official data shows Minth supplied battery enclosures for 8 of the top 15 best-selling EVs in Europe. Of the 75.7 billion yuan in new orders booked in 2025 on a life-cycle basis, 61% were international and 82% were related to new energy vehicles.
Regarding margins, Minth overall gross margin stood at 28% in 2025. While it did not disclose overseas margins directly, its Body Structure BU—the core engine of overseas growth, formerly the Battery Enclosure BU—posted a 23.9% margin, up 2.5 percentage points. That figure hit 24.7% in the second half of the year, a record high.
Beyond these, other players are also making gains abroad.
ThunderSoft saw its revenue share in Europe and the Americas exceed 30% in 2025, soaring 137.8% year-on-year with a gross margin of 27.31%. In Japan, margins were even higher at 38.75%, surpassing the 33.06% recorded in China.
Companies like Weichai Power, Gotion High-Tech, Tuopu Group, and EVE Energy all reported higher overseas margins than domestic ones. Specifically: Weichai Power overseas margin was 22.55% versus 20.26% at home; Gotion High-Tech stood at 20.7% against 14.85%; Tuopu Group hit 20.54% compared to 17.31%; and EVE Energy, with international revenue accounting for 23.56% of the total, achieved a 20.21% margin abroad, beating the 14.93% at home.
Some firms posted lower overseas margins than domestic ones, but the trend is clearly improving. Zhongchuang Zhiling generated 13.16 billion yuan in international revenue—31.8% of its total—with an 18.61% margin. While trailing the 24.45% domestic margin, this represents a 1.84 percentage point increase from last year. Joyson Electronics overseas margin was 17.93% in 2025, lower than at home, yet still up 2.75 percentage points year-on-year.
The data points to a clear shift: in 2025, overseas business for top parts suppliers was no longer just about "scale expansion"—it entered a new phase of "high-quality profitability."
Data from Yuanda Information Securities shows that if we define the "going global" sector as parts suppliers with over 20% overseas revenue, this group consistently outperformed the industry average in both gross and net margins between 2020 and 2024—and the gap has widened in recent years.
Particularly in technically demanding fields like power batteries, auto glass, and body structural parts, overseas margins are generally higher. The global competitiveness and brand premium capabilities of China top suppliers are genuinely on the rise.
Behind the Profits Lies Real Capability
Why are overseas operations so competitive? The answer lies not only in corporate effort but also in the underlying logic of overseas markets themselves.
Analysts at Yuanda Information Securities point to two main drivers for this profitability edge abroad:
First, the market space is larger. Over the past decade, global auto sales outside China have been roughly double those inside. A higher base of vehicle production and sales translates to greater demand for parts. Additionally, parts prices are higher overseas. Take the Tesla Model Y, Volkswagen Tiguan L, and Toyota RAV4 as examples: pricing across China, the U.S., and Germany shows that foreign prices are significantly higher than domestic ones, giving parts suppliers a pricing advantage.
Second, the competitive and operating environment is superior. In terms of competition, the overseas parts industry is highly concentrated, dominated by top-tier international players with fewer entrants. Disorderly competition and cutthroat price wars are far less common than in the domestic market. Commercially, overseas OEMs offer more standardized payment terms and stable settlement cycles, helping suppliers ease cash flow pressure and improve earnings quality.
Of course, several key forces have combined to propel Chinese companies to the forefront.
First is the "tailwind" effect from vehicle exports. In recent years, numerous Chinese automakers have accelerated their global expansion with substantive breakthroughs. Chery Automobile, for instance, generated 157.42 billion yuan in overseas revenue in 2025—52.4% of its total—surpassing its domestic market for the first time.
When establishing plants or launching new models abroad, automakers often prioritize familiar domestic supply chain partners to ensure compatibility and reduce communication costs. YAPP Automotive Systems Co., Ltd. is a prime example. Following the global footsteps of BYD and Chery, it has laid out operations in emerging markets like Southeast Asia, North Africa, and Europe. Supply volumes from its bases in India, the Czech Republic, Mexico, and Uzbekistan all saw double-digit growth.
Second is technological breakthrough. Historically, Chinese parts firms were often trapped in "homogenized low-price competition," earning meager processing fees. Now, heavy R&D investment is finally paying off in high-end markets.
The fundamental reason CATL secures higher margins abroad than at home is that its batteries are world-class in energy density, fast-charging, and safety. This meets the stringent requirements of international automakers for core components, allowing CATL to command a technology premium rather than relying on cost-cutting to buy market share.
Fuyao Glass tells a similar story. After decades of focusing on auto glass technology, its smart panoramic sunroofs, dimmable glass, and HUD glass have tapped into the trends of lightweighting and intelligence. In the quality-conscious North American market, demand for these high-value products outstrips supply, directly driving up profits.
Image source: Fuyao Glass
Third is deep localization. In the past, reliance on export trade meant high tariffs, expensive logistics, and long cycles—compressing profits at every turn. Now, more companies are pursuing localized production, R&D, and sales, fundamentally optimizing their profit structures.
Gotion High-Tech moved quickly on this front in 2025. Its bases in Morocco and Slovakia, along with the Vietnam Phase II project, are progressing as planned. The unified battery cell developed for Volkswagen Group was officially delivered at the end of 2025, supplying entities including VW Germany and VW China. This deeply integrated localized layout reduces logistics and tariff costs while boosting response speed and customer loyalty.
Tuopu Group is also advancing overseas bases in Mexico and Poland. Although new capacity is still ramping up, with depreciation and amortization weighing on short-term profits, this is precisely the "growing pain" inevitable in globalization.
Fourth is the upgrade of cost advantages. This edge is no longer just about "cheap labor" but a comprehensive reflection of economies of scale, global resource integration, and supply chain resilience.
Fuyao Glass leverages its global production scale for strong pricing power, diluting costs through mass production and replicating this model at overseas plants. Joyson Electronics is gradually unlocking global synergies through resource restructuring in Europe and North America.
Facing supply chain volatility, more Chinese firms have established multi-source supplier systems and locked in raw material prices in advance. Even Nissan has publicly stated it is studying the cost competitiveness of Chinese suppliers and considering incorporating them into its global strategy.
The convergence of these four forces enabled Chinese parts suppliers to transition from scale expansion to quality improvement in overseas markets throughout 2025.
Striking Gold Overseas Is No Easy Road
But not everyone profits overseas. 2025 financial reports reveal a brutal reality: going global is a high-stakes obstacle course. While some are raking it in, others are bruised and battered, forced to scale back or even axe their overseas operations.
In 2025, Weichai Power total revenue rose 7.47% to 231.81 billion yuan, with overseas revenue exceeding 50% for the first time—a major milestone in its internationalization. However, net profit attributable to shareholders fell 4.2% to 10.93 billion yuan. A key factor in this decline was a 1.28 billion yuan non-cash charge by its overseas subsidiary, KION Group. This indicates that even leading players deeply entrenched abroad cannot fully avoid the volatility of international operations.
Tuopu Group faces similar short-term pressures. Revenue climbed 11.21% to 29.58 billion yuan in 2025, but net profit fell 7.38% to 2.78 billion yuan. The primary drag on earnings came from high fixed costs—such as depreciation and amortization—as new bases in Mexico and Poland ramped up capacity.
Minth Group overall gross margin dipped to 28% in 2025, down 0.9 percentage points from 28.9% in 2024, largely due to the ongoing push for localized global production.
Analysts at Yuanda Information Securities note this is a common pattern for expanding firms: in the early stages of building overseas plants, concentrated rigid costs and ramping capacity utilization often squeeze margins. However, over the medium to long term, as utilization rates rise, economies of scale kick in, and local operational experience accumulates, there is clear room for profitability to improve.
If the previous two cases represent "growing pains," then the experiences of Ningbo Huaxiang and Bohai Automotive offer bloody lessons. Ningbo Huaxiang European operations were a "bleeding point" for over a decade. From 2013 to 2024, its European business lost money every year, accumulating over 2.6 billion yuan in losses. Finally, in 2025, it resolved to sell its equity in six European subsidiaries, shedding the burden that had dragged on its performance.
This case serves as a stark warning to followers: overseas M&A and operations are far more complex than imagined. Cultural clashes, union barriers, low capacity utilization—any one of these issues can erode profits for years.
Bohai Automotive fate was even more brutal. Its German subsidiaries, Bohai International and BTAH, were forced to file for bankruptcy as orders slumped and losses widened. Financial reports show that in 2024, Bohai domestic revenue and gross margin rose by 12.91% and 1.58 percentage points respectively, while overseas business plummeted by 28.51% and 25.19 percentage points.
Between the rise and fall, the decline of overseas operations became the main weight dragging down overall performance. It reminds the industry that opportunity and risk are tied together abroad. If a company lacks competitive strength, overseas markets will not save it—they will drag it under.
Beyond financial challenges, non-commercial risks are becoming increasingly prominent. Nexperia, a subsidiary of Wingtech, was hit with a global asset freeze order by the Dutch government on "national security" grounds, with courts forcibly seizing shares and dismissing Chinese directors. Such events highlight that geopolitics has become a minefield Chinese companies cannot bypass in their global expansion.
Even CATL, a profitable player abroad, admits that "going global is hard." Zhu Lingbo, CTO of CATL overseas division, put it bluntly: "It is hard, really hard—especially building a plant in Germany." The approval processes, laws, regulations, and cultural differences are far more complex than in China. Even changing equipment inside the factory requires reapplying for permits. These institutional barriers lengthen the return on investment cycle, testing a company patience and comprehensive capabilities.
Synthesizing the 2025 financial reports and real-world cases, the conclusion is clear: the path for Chinese auto parts suppliers is moving from the "shallow end" to the "deep end." In the shallow waters, exporting products brings incremental revenue with relatively low barriers. But in the deep end, companies must build full-chain capabilities overseas—production, R&D, sales, and service—and navigate complex challenges like geopolitics, cultural conflict, and supply chain restructuring. Those who can swim these waters will secure an irreplaceable position in the global market and reap true globalization dividends. Those that fail to keep up with cross-cultural management or struggle to raise capacity utilization risk sinking under the weight of expensive trial and error.
