The Chinese automotive industry is in full international expansion. After years in the shadow of the Korean, American, European and Japanese groups, the Asian giant is taking advantage of the rise of electric mobility as a springboard to enter new markets of great strategic interest such as Australia, India or Europe itself.
The historical advantage of traditional brands in the development of internal combustion engines does not exist with electric cars, since all players start from the same point. Aware of this, the Chinese authorities have been financially supporting domestic electric vehicle and battery manufacturers for years, a strategy that is already beginning to bear fruit.
If we add to this low labor costs of the country, we have as a result the perfect breeding ground to create a strong and technologically advanced industry capable of taking other regions by storm. For this reason, some voices in the sector are asking the European Union for measures to protect companies from the old continent.
“If there is anything to fear, it is the decline of the Western world. We need to work more efficiently to beat the Chinese not only in technology but also in quality, price, service… That is the main problem we are facing”recently declared Carlos TavaresCEO of the powerful Stellantis group.
Europe is at a disadvantage compared to China
«The European market is completely open to the Chinese and we don’t know if their strategy is to gain market share at a loss and increase their price later. President Macron [Francia] understand this, but there has to be a bigger front [la Unión Europea] to say we welcome the Chinese to Europe, but only if they compete with us under the same rules.”
Turkey has gone ahead of Brussels and has already taken action on the matter with the aim of defending its industry from Chinese competition, as it has just announced that will impose tariffs of 40% on electric vehicles manufactured in that country. This measure will come into force just before the national firm Togg begins production of its first electric model.
Should the European Union follow Turkey’s example and adopt protectionist measures? The truth is that, despite the fact that countries like Germany (whose manufacturers have a lot of weight in China) are reluctant for the moment, everything seems to indicate that this will be the only way to protect the local industry and current employment levels.
Source | Bloomberg
