The irruption of the chinese electric carswith highly competitive prices, has put the European automobile industry in check. This has been demonstrated by the protectionist response from Europe: imposing more expensive tariffs on electric vehicles arriving from China.
The situation is especially complicated for Volkswagena traditional reference for the strong German economy that is not so strong today. For the first time in their history they will close factories in Germany. And it seems that the companies of the People’s Republic are planning the final blow: buy these Volkswagen plants to manufacture their electric cars there.
Without tariffs and producing within one of the strongest economies in Europe
This movement would have been confirmed to Reuters a source knowledgeable about the Chinese government’s intentions. “Buying a factory would allow China to gain influence in Germany’s prized automotive industryhome to some of the oldest and most prestigious car brands,” the source notes.
It would be a win win for Chinese brands. First, because of what it means to fully enter one of the strongest economies in Europe and, in turn, the greatest German industrial force: the automobile. contributes almost 3% of GDP. And second, because it would mean avoiding the import taxes that already apply to every electric car arriving from China, which can be up to 45.3%.
China is already taking advantage of nooks and crannies to strengthen its presence in the European market. For example, focusing on imports of hybrid models. And also setting up factories in Europe to design their electric models there and thus avoid having to bear the new tariffs.
The Dresden and Osnabrück plants in the spotlight. Volkswagen is going through a deep crisis derived from its poor strategy for electric cars: they have invested nearly 73 billion euros in this new technology, but sales have not followed. Their zero-emission models do not sell enough and are far from being profitable in terms of production. They have a demand deficit of about 500,000 cars.
That has led the group to adopt drastic measures to cut expenses. After months of negotiations with the unions, a gradual reduction of up to 10% of its workforce in Germany has been agreed: 35,000 jobs will be lostof the almost 300,000 that Volkswagen has in the country. Mostly, in factories.
Also the closure of factories. The first will be Dresdenwhere the Volkswagen ID.3 is conceived, which will stop producing cars at the end of 2025. 340 workers work at this plant. The second, that of Osnabruckwhere the Volkswagen T-Roc Cabrio, a niche model, is manufactured. It employs about 2,300 employees and is scheduled to end operations in 2027. This factory is one of Volkswagen’s most obsolete.
For Volkswagen it would be profitable, but everything depends on the relations between both governments. A source related to Volkswagen assures Reuters that Volkswagen would be open to selling the Osnabrück factory to a Chinese firm. “We are committed to finding a continued use for the factory. The goal must be a viable solution that takes into account the interests of the company and employees.”
For the German firm it would be a profitable move: selling factories would be cheaper than selling them, an analyst tells Reuters. Consider that these assets They could be sold for between 100 and 300 million euros. Although Volkswagen has declined to make any statements on the matter. Also the Prime Minister of Lower Saxony and member of the supervisory board of Volkswagen.
On the other hand, the position of the new German government will also be decisive, which will be decided after the February elections. Although Angela Markel’s Executive strengthened business ties with China, opening the door to investments in various sectors, as well as the import and presence of German car brands in the Asian country, the current government’s position is to point out China as an enemy. . A systemic rival. Germany was one of the powers that most defended raising tariffs, and China’s response was immediate.
Added to this is that Chinese firms are concerned about the reaction and demands of the German unionsmore strongly than in other European countries. For example, Stephan Soldanski, a union representative from Osnabrück, has indicated that employees would have no problem producing cars for a possible joint venture with a Chinese firm. But “under VW standards. That’s the key condition.”
In any case, at the moment it is unknown which Chinese brands would be in the bid to take over the Volkswagen facilities, if they finally become effective.
Chinese brands producing in Europe: add and continue. There are several manufacturers from the People’s Republic that have already confirmed plants in Europe. Some of our own, others taking advantage of old facilities, as is the case of Cherywhich this same year will begin to produce zero emissions in the Free Zone, formerly Nissan Barcelona. Its intention is to deliver 300,000 cars a year, when it is at full capacity.
The giant BYD will build two factories: one in Hungary and another in Türkiye. And Leapmotor, thanks to its joint venture with Stellantis, is already doing the same in Poland: in 2025 it will launch two models at the Tychy plant.
But to date, countries like Germany, with great weight in the European economy, were not in the pools. Neither do other central European countries. That has begun to change. In addition to this possible purchase of the plants that Volkswagen is going to close, Chinese firms would have looked at others such as the Audi plant in Bruelas (another whose closure has already been definitively confirmed) or the German Ford plant in Saarlouis.
Both Chery, BYD and Leapmotor have confirmed to Reuters that their intention is to have more factories in the Old Continent. Among them, Leapmotor does not also rule out a plant in Germany.
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Source: www.motorpasion.com
