European manufacturers welcome Brussels’ desire to take action against Chinese subsidies

Peugeot e-3008 production line, in Sochaux (Doubs), September 12, 2023.

One Europe “neither protectionist nor naive” facing Chinese competition on electric cars. This is what Sigrid de Vries, the general director of the ociation of European Automobile Manufacturers (ACEA), has been asking since June. She therefore welcomed the decision – announced on September 13 – of the President of the European Commission, Ursula von der Leyen, to launch an investigation to determine the level of public subsidy from which Chinese vehicles imported into Europe benefit or have benefited.

This announcement shows that “the European Commission recognizes the increasingly asymmetrical situation that our industry is facing and is urgently addressing the distortions of competition in our sector”said Sigrid de Vries.

Cheap imports from China “are already having an impact on the market shares of European home manufacturers, with a mive increase in imports of electric vehicles in recent years”underlined Mme de Vries. Marc Mortureux, the general director of the Automotive Platform (PFA), an organization which brings together all the players in the sector in France, is on the same line: “We welcome the Commission’s decision. It is legitimate for the European Union to defend its interests. We need land game fair, and if the practices targeted are contrary to the rules of international trade, it is essential that the European Union reacts. »

Undue subsidization

The ociation of German manufacturers VDA, for which China is a very big market, unlike Renault or Stellantis, is more circumspect: it fears retaliatory measures which would be damaging for its members. Asked by The world in Munich, Walter Mertl, the financial director of BMW, or Thomas Schäfer, the boss of the Volkswagen brand, have at no time called for such a decision.

While making it clear that he was not prejudging the outcome of the investigation – which has thirteen months to complete – Thierry Breton, European Commissioner responsible for the internal market, said a little more about what the consequences of the investigation could be. ‘undue subsidization of the industry: “In general, this results in customs duty increases of 10 to 20%. » Today, these duties are 10%, while those paid by European cars entering China are 25% and those paid by Chinese cars arriving in the United States are 27.5%. According to the consulting firm AlixPartners, Chinese state aid to develop electric and hybrid vehicles would have reached 57 billion dollars (53 billion euros) from 2016 to 2022. It would have allowed China to take the title from Japan as the leading automobile exporter in the first quarter of this year.

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