China to exert political pressure in the EU via its car manufacturers
As Reuters reports, citing insiders, China wants to increase the pressure on its carmakers to deny investments to those EU countries in particular that have advocated tariffs in Europe. Two people familiar with the matter told the Reuters news agency that Chinese carmakers have been asked to stop major investments in these EU countries. The European Union’s new tariffs of up to 45.3 per cent came into force on Wednesday after a year-long investigation. However, the decision was very mixed: Ten EU members, including France, Poland and Italy, were in favour of the tariffs, five members, including Germany, were against and twelve abstained.
A week ago, Bloomberg had already written that China was urging its car manufacturers to halt EU expansion plans. To date, however, it was supposed to be a ‘directive’ and not a binding order. Reuters now specifies that a meeting had already taken place at the Chinese Ministry of Commerce on 10 October, which was attended by BYD, SAIC, Geely and foreign OEMs, among others. There, the government representatives are said to have asked the participants to stop their plans for major investments – such as the construction of factories – in those countries that support the tariffs.
The car manufacturers present at the meeting are also said to have been told that they should ‘avoid separate investment talks with European governments and instead work together to hold joint talks’, according to the insiders.
This is not the first time this type of influence has been exerted: back in July, China’s Ministry of Commerce instructed its own car manufacturers not to invest in countries such as India and Turkey and to ‘be cautious’ when investing in Europe.
The government’s influence is of course particularly strong when it comes to state-owned car manufacturers. Dongfeng is said to have already cancelled plans for the possible production of cars in Italy. The company is said to have told Italian authorities that Italy’s support for EU tariffs on Chinese electric cars was the reason for the change of course.
Changan has also cancelled a European market launch event planned for last week in Milan. Changan had planned to present its model portfolio and design philosophy to the European media last Friday. Among other things, a speech by Zhu Huarong, Chairman of Changan Automobile, had been announced.
It is currently unclear what effect the directive will have on private manufacturers such as BYD, Xpeng or Nio. BYD is not only planning to restart sales in Germany, but is also planning an electric car factory in Hungary. Xpeng has also been officially looking for a production site in Europe since the summer.
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