China has asked its automakers to avoid any significant investments in European countries favorable to an increase in customs duties on electric vehicles built in China, according to two sources familiar with the matter. An orientation from Beijing likely to further divide European countries.
The new European Union customs duties, which can reach 45.3%, came into force this Wednesday, October 30 after a year-long investigation which divided the Twenty-Seven and generated retaliations from Beijing . Ten EU member states, including France, Poland and Italy, voted in favor of raising tariffs in a vote held in early October. Five, including Germany, opposed it and 12 abstained.
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As Beijing continues negotiations to find an alternative to tariffs, Chinese automakers including BYD, SAIC and Geely were asked at a meeting hosted by the Commerce Ministry on October 10 to suspend their plans. investment in countries that supported the proposal, the two sources said. These people declined to be named as the meeting was not public.
Foreign automakers attended the meeting where participants were urged to exercise caution in investing in countries that abstained from voting and “encouraged” to invest in those that rejected tariffs, said the sources.
Geely declined to comment. SAIC, BYD and the Commerce Ministry did not immediately respond to requests for comment.
Italy and France are among EU countries that have wooed Chinese automakers for investment while warning of risks to European manufacturers from an influx of cheap Chinese electric vehicles .
Caution of Chinese actors
State-owned SAIC, China’s second-largest auto exporter, is selecting a site for an electric vehicle factory in Europe and plans to open a second European parts center in France this year to meet the needs of its MG brand cars.
The entourage of the French Minister for Foreign Trade, Sophie Primas, refused to make any comments pending a meeting with her Chinese counterpart Weng Wentao scheduled for Sunday, November 3 in Shanghai, where the subject of the consequences of the increases tariffs “will be addressed”, he told Reuters. “France’s positioning is not only offensive, we must be in a dialogue, not just in confrontation,” a French diplomatic source told Reuters on Tuesday. “We have interests in China, it is important to maintain the dialogue which must take place in good conditions and on fair competition,” she added as the interview between Sophie Primas and Weng approached. Wentao, organized on the occasion of the China International Import Expo in Shanghai.
The Italian government is in talks with Chery, China’s largest automaker by exports, and other groups such as Dongfeng Motor for potential investments. The Italian Industry Ministry declined to comment. Dongfeng and Chery did not immediately react.
BYD is building a factory in Hungary, a country that voted against tariffs. The Chinese electric vehicle giant is considering moving its European headquarters from the Netherlands to Hungary for cost reasons, two separate people familiar with the matter said.
Even before Beijing announced its guidelines, Chinese companies were cautious about setting up production sites in Europe, as it requires significant investment and in-depth knowledge of local laws and culture.
At the Oct. 10 meeting, automakers were urged to avoid separate investment talks with European governments and work together to have collective discussions, the people said.
In July, China’s Commerce Ministry issued similar warnings, advising Chinese automakers not to invest in countries such as India and Turkey, and to be cautious about investing in Europe.
With Reuters (Zhang Yan and Kevin Krolicki, with contributions from Elizabeth Pineau in Paris; French version Florence Loève, edited by Kate Entringer)
Source: www.usinenouvelle.com
