The stated objective of the surcharge is to re-establish fair conditions of competition with Chinese manufacturers accused of benefiting from massive public subsidies.
( AFP / – )
Chinese manufacturers will continue their aggressive pricing strategy in Europe on their electric cars, despite the implementation of customs surcharges in Europe.
MG, the leading Chinese manufacturer in Europe, has
committed to maintaining the prices of its 100% electric vehicles until the end of 2024.
MG, a brand of English origin that has become a subsidiary of the Shanghai group SAIC, and surcharged at 35.3%, stored cars in Europe before these taxes came into force.
“Prices in the automobile market have soared in recent years, but our desire to offer technological, safe and low environmental footprint vehicles to French motorists is intact,” Julien Robert, vice-president of MG Motor France, declared in a statement on Friday. press release.
BYD, surcharged at 17%, and in full expansion phase with
openings of dealerships by the hundreds
has increased discounts in recent weeks on its sedans and SUVs.
Up to 45% surcharge
Chinese electric vehicles sold in Europe must be subject to an import tax of up to 45% from the end of October, after final validation by the European Commission. The stated objective is to re-establish fair conditions of competition with
Chinese manufacturers accused of benefiting from massive public subsidies
which allow them to offer the latest electric models at knockdown prices.
Tesla, which benefits from a less punitive surcharge (7.8%), first increased prices on its Model 3 sedan, manufactured in China, before lowering them on Tuesday.
As for Xpeng, which is only arriving in Europe by focusing on its high-tech vehicles,
“Friday’s vote unsurprisingly confirms a situation that has been known for several months
. This does not change our plans (including prices), which have always taken this context and these taxes into account,” a spokesperson for the brand told
AFP
.
How long will Chinese manufacturers be able to hold out by cutting into their margins in this way?
“It could last a while.”
estimates Sébastien Amichi, expert from the Kearney firm. “We can imagine that a response from the Chinese government would be to strengthen its export support system, at least for 2-3 years, the time to support the rise of these brands.”
Furthermore, the volumes of Chinese cars remain measured in Europe, around 300,000 vehicles in 2024 in a market of 15 million, and therefore “easy to subsidize”, according to Sébastien Amichi. And even at an equivalent price,
Chinese vehicles will still remain “inherently quite attractive”
compared to their European equivalents, particularly with their technological offering.
These price offers have limits, tempers Mikaël Le Mouëllic, from the BCG firm, because
Chinese manufacturers want to “restore their profits”
.
The very “extremely competitive” Chinese market
“If Chinese manufacturers come to Europe, it is because their (domestic) market is extremely competitive and they are losing money there,” underlines the expert.
At the same time, MG, BYD but also Chery have planned to open factories in Europe (Hungary, Spain) and Turkey, which will allow them to avoid these taxes. “There are European states that have contacted me so that I can sell factories to the Chinese,” said Stellantis CEO Carlos Tavares on Thursday.
If Chinese brands capture 10% of a European market stuck at rock bottom,
there will be mathematically 7 to 8 factories to “close or transfer to the Chinese”
commented the manager of the European No. 2 during a visit to his factory in Sochaux (east). Stellantis has also started producing small electric cars for its new Chinese partner, Leapmotor, in a Fiat factory in Poland.
At the same time, German brands fear a severe backlash on their sales in China, which represent a significant part of their profits. And the Chinese government has started to make other European sectors pay, such as cognac producers.
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