German Manager Magazine: Trade dispute: China hints at car tariffs for imports in Brussels003328

In the customs dispute with the USA and the European Union lays China and brings higher taxes into play. An expert from a state research institute spoke of a 25 percent import duty that would apply to Western combustion vehicles with larger engines (over 2.5 liters). This is particularly likely for German car manufacturers BMW and Mercedes meet. Liu Bin, an expert at the China Automotive Technology & Research Center (CATARC), explicitly justified the proposal with the plans for punitive tariffs in the USA and Europe.

Accordingly, the European automotive sector was in last place in the industry overview with minus 1.7 percent. The shares of Porsche AG were among the biggest DAX losers with a loss of 3.6 percent. BMW, Mercedes-Benz and Volkswagen lost between 1.2 and 2 percent.

Stuart Cole, chief economist at financial services provider Equiti Capital, said these comments from China were “clearly a warning shot.”

The EU Commission wants to decide in June whether to impose anti-dumping tariffs on Chinese electric cars, following the US example. There the trade representative now presented details about the punitive tariffs, which should increase to 100 percent from August. The US government announced that a 30-day consultation period would then end. In addition to electric cars, there are also semiconductor and numerous other products affected by the higher tariffs.

The tariff plans have met with unanimous criticism in the automotive industry. StellantisBoss Carlos Tavares (65) described tariffs as a “bigger trap” in an interview with the Reuters news agency on Wednesday. They did not prevent Western car manufacturers from adapting to competition from China, but simply drove up inflation. BMW boss Oliver Zipse (60) also criticized the tariffs at the general meeting and pointed out that a large proportion of the electric vehicles imported from China are produced by Western manufacturers. BMW, for example, is introducing the electric Mini from the People’s Republic, Mercedes is producing the Smart there Renault-Subsidiary Dacia produces the Spring in China.

Stellantis boss: Governments shy away from adaptation

Tavares said electric car makers from China currently have a 30 percent cost advantage. If you want to face the competition and offset the cost advantage, that will have consequences for society, said the head of the Opel-parent company. “But the governments of Europe don’t want to face this at the moment.” However, his company is in good discussions with the unions. “Most of the time they agree with us on what the risk is that we face and how we get through this time.”

The auto industry is not talking about a Darwinian period, “we are in the middle of it.” The price war with the Chinese rival will be “very tough”. “It won’t be easy for the dealers. It won’t be easy for suppliers. It won’t be easy for the car manufacturers themselves. Chinese car manufacturers are on track to sell 1.5 million cars in Europe, which corresponds to a market share of 10 percent. Companies like BYD also rely on their own works. Tavares spoke of up to ten factories that could be built. “If we allow the market share of Chinese car manufacturers to grow, then it is obvious that excess capacity will arise.”

The Opel parent Stellantis recently founded a joint venture with the Chinese manufacturer Leapmotor and secured the right to sell Leapmotor vehicles outside of China. In addition, Leapmotor vehicles will roll off the assembly line in Stellantis factories. The French-Italian company is thus expanding its range of affordable vehicles. “We are trying to become Chinese ourselves,” Tavares said. “We want to be part of the Chinese offensive.”

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