Perspective on Chinese Automotive Manufacturing in Europe
While the European Commission attempts to limit the entry of Chinese manufacturers into the European market, they remain determined. They could soon benefit from an unexpected proposal from the Austrian company Magna Steyr to produce their vehicles in Europe, allowing them to benefit from environmental bonuses.
The Chinese Rise
This trend was already evident at the Paris Motor Show in 2022. Since then, the invasion of Chinese manufacturers in Europe has intensified. Brands like MG, with the MG4, and BYD, a global leader, are already well-established. Others, such as Xpeng and Nio, are closely following. The European Union is trying to curb this penetration, notably through an investigation for unfair competition.
The Role of Magna Steyr
Magna Steyr, a renowned Austrian subcontractor, offers its services to fill gaps in its production after stopping the manufacturing of the Fisker Ocean. The company has contacted several Chinese manufacturers in Europe, offering its facilities to assemble their vehicles. The company’s president, Roland Prettner, did not mention names, but brands like Xpeng, Nio, or Zeekr are naturally mentioned. BYD, on the other hand, plans to build its own factory in Hungary.
Local Advantages
Discussions between Magna Steyr and the Chinese manufacturers are ongoing. Despite higher labor and energy costs in Europe, local production presents advantages. Notably, cars manufactured in Europe could benefit from the environmental bonus in France, which has been removed since early 2023. The European Union could also increase customs duties to slow down the import of Chinese cars, a problem that would be resolved for locally produced vehicles.
Challenges and Prospects
Setting up production lines in Europe would simplify logistics and reduce costs. However, discussions are ongoing, and manufacturers need to assess their sales targets to adjust production. It remains to be seen how Brussels will react to this initiative, which will circumvent its efforts to limit the invasion of Chinese vehicles in the European market.
