Chinese car manufacturers ready to invade Europe

Chinese car manufacturers ready to invade Europe

The latest news comes from Chinese Ministry of Commerce. It has created a handbook for vehicle manufacturers in the Dragon Country to encourage automakers to set up research and development centers and after-sales services abroad, as well as collaborate with foreign partners in building supply chains and work on more close contact with shipping companies on transport logistics. A useful support for brands ready to attack the Western four-wheel market. How many? There should be more than 50 car manufacturers founded in China in the wake of the green transition and in the name of electric. Many will disappear and merge. Those that today point towards the West, and are also of interest to the Italian government, are at most twenty. «More than aiming, the Chinese houses are already among us; at the end of 2023 the share in Europe is 4% and within two years it will have risen to 6%”, underlines Dario Duse, Italy country leader of AlixPartners and expert in the AU sectorto.

What are the brands that European brands have to deal with? The first is definitely Byda giant that is building a sales network – 230 retailers in the EU – surpassed, in the last quarter of 2023, Tesla on the production front and will open a factory in Hungary. Then, there is Aiways, Seres, the brands of the Great Wall Motor group. And the list continues with Geely, Zeekr, Xpeng, Fengshen, Nio and Saic. A brand that is gaining ground in Italy is MG, once British, now made in China. Brands that will be present at the Geneva Motor Show at the end of February. The Chinese Ministry of Commerce, in the guidelines, involves banks, which are encouraged to expand services for manufacturers and companies that supply components. The package launched by the ministry last Wednesday includes rules to optimize the procedures for exporting plugged-in machines and batteries.

The ministry’s guidelines are a support to Beijing groups that are ready to move westward. In 2023, according to the China Association of Automobile Manufacturers (Caam), vehicle sales increased 12% to 30.09 million units. A similar growth rate was found for production volumes: +11.6% and 30.16 million vehicles assembled. Industrial performances are supported not only by the domestic market, but also by foreign markets: exports increased by 58%, up to 4.91 million vehicles shipped elsewhere, and surpassed Japan. «It took China 55 years to increase the number of automotive exports from one to 1 million. In 2021 it exceeded 2 million and in 2023 it reached 4.91 million, approaching 5 million.” says Fu Bingfeng, general secretary of Caam. «The domestic market for China represents an important portion of sales, but it has a very strong production capacity, so it is necessary for Beijing companies to find outlets in other countries and continents. Europe is at the top of the table”, explains Duse. The Beijing Ministry of Commerce, considering the investigation launched last September by the EU into Chinese government subsidies for the sector and the US intention to raise tariffs on some products, starting with cars, invites the four-wheel industry to respond actively to any trade restrictions and cooperate with foreign companies. And the protectionist policies of the West could have an effect: speed up the opening of factories in the EU by groups from the Land of the Dragon. «At the end of the decade, the market share of Chinese electric cars in Europe could reach 10% – underlines Stefano Aversa, global vice-chairman and chairman EMEA of AlixPartners – already today the production capacity is second to none and the quality level of the cars is good, especially in software and infotainment, elements that attract new generations of motorists. Also because mechanics will have less and less importance, they will be increasingly governed by software.”

In Europe, just to talk about mechanics, there are 122 plants where traditional engines are produced which will need to be reconverted. The groups’ intention to open factories in Europe attracts the attention of countries, including the Italian one. BYD led the way, closing an agreement with the Hungarian government for a plant dedicated to cars in Szeged. The second in Hungary, after the one for the production of electric buses. In Italy the Minister of Business and Made in Italy, Adolfo Urso, he says that «we are working so that a second car manufacturer can establish itself in Italy. And if the money put on incentives has no effect on national production, from next year all the remaining funds, 5.3 billion, will be used to attract a producer.” The ministry created an ad hoc task force, with Amedeo Teti at its head, to scout among foreign groups, starting with the Chinese. Among the candidates there would be the group Cherywhich already has relationships in Italy with Dr to which it supplies cars. Then there are the Americans, like Tesla which has opened a factory in Berlin and is thinking of a second plant. In Rome the antennas were focused on South Korea and Japanfrom where Prime Minister Meloni recently returned.

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