MG, which is still doing well in Europe, could export its cars sold here from Thailand instead of China. In this way, the manufacturer could escape the increase in customs duties decreed by Brussels at the beginning of July.
While Chinese cars are increasingly numerous in Europe, This does not please the high authorities at all.quite the contrary. And the latter now want to do everything in their power to dissuade manufacturers from the Middle Kingdom from selling their cars here.
A smart solution against taxes
Brussels already unveiled a series of measures last year, and has now tightened the screws even further by introducing particularly punitive customs duties on Chinese electric cars. This decision follows the investigation that had been opened, accusing the manufacturers of unfair competition, since they would benefit from government grants. Which allows them to sell their vehicles at prices significantly lower than those charged by European brands.
But not everyone is in the same boat when it comes to the new taxes, which are added to the 10% already in force for several years. It is in particular the SAIC group, which owns MG, which is paying the heaviest price, with additional customs duties of 37.6%. A real cold shower for the Chinese firm, whose MG4 is a hit in France. But the latter is far from having said its last word. After having filled its European stock in order to keep a low price for a few more months, the manufacturer has found another solution.
This is what explains Thai website The Nationwhich indicates that MG may have found the solution to ensure that its electric cars are no longer affected by high customs duties in Europe. If the firm had planned to build a factory on the Old Continent, this project still seems far from coming to fruition for the moment. And so we should not bet too much on it for the moment, even if it is still in the pipeline. But what is the other trick of the Sino-British firm, whose The European headquarters is located in Oxford ?
In fact, the latter plans to import its electric cars no longer from its native country, China, but rather from Thailand. A choice that was obviously not made arbitrarily, since the manufacturer has a factory in the country, built in 2017 and which has a production capacity of 100,000 cars per year. And of course, The MG4 has been produced there since the end of last year.which greatly facilitates the implementation of this new strategy by the brand.
Not so simple…
However, it will not be enough for the brand to send only its cars produced in Thailand to Europe for the trick to work. It will be a little more complicated than that, because more is needed to be able to fool the European Union. For the production of the MG4 to be considered truly Thai, it is necessary that:at least 40% of the components of the car are actually produced in the country. Fortunately, this is entirely feasible.
The SAIC Motor Vice President Suroj Sangsnitexplains that Chinese manufacturers have significantly increased their investments in Thailand, in order to produce more components locally. And thus achieve the 40% target, which is essential to avoid customs duties. Now, the government of this large country in Southeast Asia is in the process of negotiate a free trade agreement with the European Union which should be completed by the end of the year.
The goal? Opening the doors of the Old Continent to Thai industry and allow manufacturers that produce their cars locally to benefit from reduced import taxes. But MG is not the only one considering relocating its production to avoid customs duties, since this is also the case for Volvo, which plans to assemble its EX30 in Belgium and no longer in China, for the same purpose. This would also allow it to benefit from the ecological bonus of 4,000 euros in France.
