What's the reason German automakers are against imposing punitive tariffs on Chinese imports?
The US is putting up roadblocks against electric cars from China, and the EU might do the same. German automakers, however, vehemently oppose these protective tariffs. Car expert Ferdinand Dudenhöffer isn't a fan of the idea, either.
The US has imposed 100% import duties on electric cars from China, and the EU could soon follow suit. Since autumn, the EU Commission has been scrutinizing whether electric cars from the People's Republic are unfairly subsidized and can therefore be sold at much lower prices than European cars. The preliminary report will be unveiled in June - it's quite likely that temporary punitive tariffs will then be announced.
German automakers consider this a dreadful idea. If anti-dumping duties are indeed introduced, this will harm German companies more than their Chinese counterparts, warned BMW's CEO Oliver Zipse, who cautioned about potential undesirable consequences. One reason: about half of the electric cars imported from China to the EU are actually built there by European vendors, primarily from Germany.
For instance, BMW exports the electric Mini and the iX3 to Europe from China, while Volkswagen manufactures the Cupra electric SUV Tavascan in the People's Republic for the world market. Mercedes produces the Smart city car there in a joint venture with Geely - China owns a massive share in the German firm, with BAIC also holding a bigger stake. Only BAIC is against this move, having a larger share in the German company.
EU-imposed punitive tariffs would thus also impact German manufacturers. They also dread retaliatory actions. China is the leading global automotive sales market and crucial to German auto giants - unlike French manufacturers, for instance. The head of the German Wholesale, Foreign Trade and Services Association (BGA), Dirk Jandura, thus cautioned against protectionist measures. Not a single EU car has no Chinese components, Jandura said. German automakers equally source their electric models from China. "Hence, we'd be cutting ourselves in half. We need to accept competition. And we must battle for fair competitive conditions."
"Competition is necessary"
In this context, Mercedes chief Ola Källenius advocates no tariff obstructions and instead calls for lowering existing tariffs. He claimed in the Financial Times that more competition from China would benefit European carmakers in the long run. Meanwhile, VW CEO Oliver Blume added: "I'm not afraid of competition from Chinese brands in Europe."
"Punitive measures on Chinese electric cars would be a catastrophe for the German automotive industry," Dudenhöffer told ntv.de. Dudenhöffer directs the Center for Automotive Research in Bochum. China is the world's largest luxury market. "Imagining what retaliation measures by the Chinese would entail for Porsche, Mercedes, BMW, and Audi spells disaster for the German auto industry. This could destroy electrification in Europe, as affordable electric cars for customers will remain a dream."
Chinese firms are rapidly setting up factories in Eastern Europe to compete with German car manufacturers, according to Dudenhöffer. This could jeopardize thousands of jobs in the German auto industry within the medium term. Instead of instituting punitive duties, resources ought to be allocated towards research, development, and innovation in the long run. Forcing sales of e-cars with purchase incentives in the short term could also speed up the "ramp-up" of German carmakers.
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- DespiteBMW's export of electric Mini and iX3 to Europe from China and Volkswagen's production of the Cupra electric SUV Tavascan in China for the global market, German automakers like BMW and Volkswagen would be negatively impacted by EU-imposed punitive tariffs on Chinese electric cars, as Chinese firms are setting up factories in Eastern Europe to compete with them.
- According to car expert Ferdinand Dudenhöffer, punitive measures on Chinese electric cars would be a catastrophe for the German automotive industry, as China is the world's largest luxury market, and retaliatory actions by the Chinese could destroy electrification in Europe and make affordable electric cars a dream for customers.
- While German automakers like Mercedes and Volkswagen advocate for more competition from Chinese brands in Europe, as they believe it would benefit European carmakers in the long run, imposing punitive tariffs on Chinese electric cars would harm German companies more than their Chinese counterparts and could potentially jeopardize thousands of jobs in the German auto industry within the medium term.
Source: www.ntv.de
