How to deal with China? This question was a constant topic at the beginning of the week at the Paris Motor Show, where BYD, Xpeng, Hongqi and other Chinese manufacturers presented themselves with growing self-confidence. The CEO of the French Renault Group, Luca De Meo, drummed up pragmatism. “We need an agreement with China,” he said in an interview with journalists. Both sides would benefit from this. “They want access to the European market and a share of the cake, we probably need some help in return,” said De Meo. As was once the case with the Japanese and Koreans, fears that the Chinese are destroying everything here are unfounded. But he was convinced that it would not be possible to accelerate the ramp-up of electromobility without the “support of Chinese companies and the raw materials industry”. De Meo’s initiative is not new, but is becoming more topical due to the Chinese car manufacturers’ ongoing expansion drive into Europe and the growing trade tensions . “Around 70 percent of the production capacity for electric vehicles is in China,” he said in an interview with the FAZ at the beginning of the year. emphasized. One cannot do without cooperation with the Middle Kingdom if Europe is serious about the politically enforced drive transition. “It has a vehicle generation lead in electromobility and control over the entire value chain, from the raw material mines to the refineries to the Battery production,” said the Renault boss at the time, who also heads the European auto industry association Acea. Never really gained a foothold in China From De Meo’s point of view, all of this must be separated from the question of the extent to which Beijing is illegally subsidizing its manufacturers and therefore higher import duties are appropriate. The Europeans have “every right” to check whether the rules of the World Trade Organization are being adhered to, the Renault boss said. But instead of worrying about import tariffs, regulations and fines, they should first focus on a strategy and improving their competitiveness. “The real question is whether we as the European car industry will be able to do so in five or ten years to catch up with the Chinese,” he said. Without cooperation, for example in the form of joint ventures, this would be difficult. “Most gigafactories in Europe are already designed and built by Chinese companies because they have experience and know how to do it,” concluded De Meo.More on the topicThe fact that the appeal for collaboration with the Chinese comes from France of all places may come as a surprise . Unlike the German manufacturers and French suppliers such as Michelin, Valeo and Forvia (formerly Faurecia), Renault and the Stellantis brands Peugeot, Citroën and DS never really gained a foothold in the Middle Kingdom. In Brussels, France was recently seen as a key driver of higher import tariffs, i.e. more protection against the supposed “car glut” from the Far East. But while the hard line against Beijing continues to have many advocates in French politics, manufacturers have been expressing themselves in a more differentiated manner for a long time. This is no coincidence. Renault recently transferred its hybrid and combustion engine business into a joint venture with the Chinese manufacturer Geely. Both hold 50 percent of the shares. Geely is also helping Renault with the development of the new electric small car Twingo. “I think they will react soon.” Stellantis, on the other hand, based in Amsterdam but heavily controlled from Poissy near Paris, has been working together with the Chinese electric car manufacturer Leapmotor for almost a year . Last but not least, this involves a technology transfer to Europe in order to build cheaper electric cars. Like Renault and Geely, they have also founded a joint venture. However, Stellantis holds the majority capital of 51 percent and also holds almost a fifth directly to Leapmotor as well as the exclusive rights for the export, sale and manufacture of Leapmotor products outside of China. CEO Carlos Tavares explained his strategy at the Paris Motor Show by fighting against other Chinese brands with a Chinese brand that also has the cost structure of a Chinese brand. Stellantis boss Carlos TavaresEPAOn the part of French industry, there is little interest in an escalation of the European-Chinese trade conflict against this background. Stellantis is starting up Leapmotor production in Poland, but only the smallest model T03 is initially rolling off the production line there. The other Leapmotor models such as the C10, on the other hand, will be imported from China until further notice – and will suddenly become more expensive at the end of October if Brussels increases import tariffs as planned, not to mention possible retaliatory measures from Beijing. “You can imagine that the Chinese are not silent will remain,” said Stellantis boss Tavares, emphasizing: “I think they will react soon and I fear that the Europeans will be surprised.”
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