A Chinese electric vehicle (EV) maker is scouting for locations to build one of Europe’s biggest car factories.
Great Wall Motor is looking at sites in Spain and Hungary along with other countries as it targets a production output of 300,000 vehicles per year locally.
Assuming most of the carmaker’s production is concentrated there, the factory would be one of the largest in Europe.
Britain’s largest plant, run by Nissan in Sunderland, has a maximum capacity of 600,000 but in practice has been producing far fewer vehicles than this recently.
Volkswagen’s Wolfsburg plant in Germany is the biggest in Europe, with a maximum theoretical capacity of around 900,000 per year.
Amid brutal competition on pricing at home, Chinese carmakers have been piling into the European market where they have been able to undercut more established brands.
For example, BYD has increased its sales from about 36,000 to 138,000 in the first 10 months of the year while SAIC Motor, the owner of MG, has gone from about 198,000 to 250,000. The European Automobile Manufacturers’ Association (ACEA) does not publish figures for Great Wall Motor.
Parker Shi, the president of Great Wall Motor International, said his company had a target to export one million cars globally by 2030. The target includes 300,000 cars in Europe.
Mr Shi told Reuters, which reported the announcement: “That’s why we’re speeding up the European strategy. Everything needs to speed up.”
In the UK, Great Wall Motor is selling the electric ORA 03, a five-door hatchback, for upwards of £21,000, along with the Haval Jolion Pro compact SUV for about £22,000 and the POER300 pickup truck for about £31,500.
By comparison, electric versions of the Mini Cooper and the Vauxhall Corsa – which are similar in terms of performance – start at around £28,000 and £27,000 respectively.
But as Chinese firms’ sales have grown, so has anxiety in European governments about the threat to local jobs and regional brands such as VW and Renault.
The companies have stolen a march in particular on EVs, which they are able to produce at significantly lower cost than their European counterparts.
There are also concerns about the massive amounts of state aid lavished by Beijing and Chinese local authorities on their own car manufacturers through cheap loans, vehicle mandates, charging infrastructure and grants.
Against that backdrop, the European Union last year imposed tariffs on imported Chinese EVs.
That has spurred the companies to look at local production lines. However, to avoid tariffs, they will have to meet certain “rules of origin” requirements that demand more than simply shipping parts to Europe and putting them together.
Mr Shi said Great Wall Motor was keeping a close eye on EU policies, including emission rules designed to spur the sales of EVs.
“It’s going to be a huge investment for a long term,” he added.