MG is the big loser from the European Union’s plan for additional customs duties against Chinese manufacturers.
Star of the year 2023, MG took a first blow to the head with the loss of the Ecological Bonus. No problem, because the brand immediately pulled out generous discounts from its sleeve that allowed it to continue its triumphant march. But the blow that the European Union is preparing to deal to its parent company SAIC risks hurting much more!
The EU has in fact announced that it plans to impose new customs duties on imports of Chinese electric vehicles. These taxes aim to counter excessive aid granted by the Chinese state to its automobile industry, which allows exported vehicles to be sold at lower prices than their global rivals. It follows a nine-month investigation into alleged unfair government subsidies for Chinese electric vehicles. The manufacturers were invited to plead their case, and if some like BYD chose transparency and got away with the honors of a lesser penalty, others received a historic sanction.
To put it simply, EV makers who cooperated with EU investigators will face tariffs of 17.4% to 21%, while those who sulked move to the higher level of 38.1%. These taxes are in addition to the 10% already applied.
MG takes a spanking
MG’s owner, Chinese state group SAIC, faces the highest tariff at 38.1%. Geely, which holds a stake in Volvo, receives 20%. A 17.4% tax will be applied to the entire BYD range, including the new Dolphin and Seal U launched in the EU last year.
The percentage will not be applied as is to the list price because it takes into account multiple factors. According to figures released by the EU, A rate of 17.1% will increase the cost of an entry-level car of 30,000 euros by 5,250 euros. A rate of 38.1% will result in a price increase of 11,450 euros.
Thus at MG, the MG4 Standard to go back above the 40,000 euros mark while it is displayed today at 24,990 euros with the exceptional bonus of 5,000 euros granted until 06/29/2024 . Suffice to say that at this price, it loses all competitiveness compared to a Tesla Model Y manufactured in Europe and therefore exempt from taxes and even eligible for the Ecological Bonus! And what about the Marvel R which could approach 60,000 euros with premiums deducted!
In theory, these new customs duties should be applied from July 4. Chinese companies have until then to challenge the EU’s findings and obtain an adjustment to border sanctions. Constrained and forced, SAIC will have to make an effort to save its flagship brand!
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