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Manufacturers warn, Europe faces an economic disaster due to the invasion of Chinese electric cars

The arrival of the large Chinese groups is making Western manufacturers very nervous. Mainly in a Europe that has not implemented protectionist measures for its powerful automobile industry, which, according to studies, faces a potential disaster due to the impact of Chinese products.

This is indicated on the one hand by a report by the consulting firm Allianz Trade, which estimates that by 2030 the European groups They could lose up to 7,000 million euros a year because of the impact of Chinese electric cars.

The report puts on the table some of the necessary measures so that the blow to the products of the Asian giant is not definitive for the European automobile industry. Mostly allude to protectionist measures as a tool to reduce the competitive advantage of Chinese cars.

It is proposed to meet the challenge with reciprocal tariffs on vehicles imported from China, both those made by local brands and by Western groups. Something that will favor the alternative of producing their cars within the borders of the EU.

One of the most authoritative voices in the sector is Peugeot CEO Linda Jackson, who has also warned that Chinese electric vehicle manufacturers are a growing threat because they offer better cars than in the past at affordable prices.

«For me the greatest danger [para los precios de los vehículos eléctricos] It is the arrival of the Chinese because they come with quite competitive prices and with very good vehicles»

The head of Peugeot has continued: “What we need to do is make sure we have the technology and not necessarily try to make the cheapest cars, but get the best value for money..”

Jackson’s comments and the Allianz Trade study echo a warning from Stellantis CEO Carlos Tavares at this year’s CES in January that the European auto industry faces a “terrible fight” with Chinese groups.

The double threat of Chinese manufacturers

European car companies face a double threat by the prospect of declining sales of their own vehicles in China, the world’s largest auto market, where local manufacturers have exponentially increased their market share in recent years, but also face to the challenge of rising sales of imported Chinese electric carsbuilt in China by Chinese or Western automakers.

According to Allianz Trade estimates, Chinese electric vehicle imports could cost the European Union more than 24,000 million euros in economic production in 2030or 0.15% of the bloc’s gross domestic product.

But the greatest blow will be suffered by those economies with the greatest dependence on the automobile sector, Germany, Slovakia and the Czech Republicwhich could face a hit of between 0.3 and 0.4% of GDP already in the short term.

The studies show how much is at stake for Europe’s automotive industry: four out of five cars sold in Europe are assembled locally. Europe is also the main world export power in the sector, with an activity that generates between 70,000 and 110,000 million euros in trade surplus for the European economy every year for the last decade.

But the lack of protectionist measures means that Europe an easy target for Chinese groups which in recent years have invested huge amounts of money in the development of their electric ranges, as well as in the construction of large car and battery factories.

Something that even the United States government has been aware of, building economic walls to prevent the entry of Chinese cars, also electric cars manufactured locally with batteries from China. Something that has caused Europe to be now the target.

And it is that today situations as absurd as a car from China is entitled to the same public aid as a model made in Spain. On the other hand, a car manufactured in Spain faces harsh tariff conditions to enter China, and will not be able to access government aid.

On the other hand, there are also arguments to defend the current situation, since it is not too far from the policies of the large European groups that have defended the need to manufacture in Morocco, Egypt or Algeria, to import into Europe and maintain their high trade margins.

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