A few days ago, the European Union decided to impose a temporary additional tax of up to 38.1%of Chinese electric vehicles. At present, this resolution has not imagined “the hearts of people.”
Not only did China protest against the European Union’s tariffs, but EU member states such as Germany and Hungary also strongly opposed it. European native car companies, especially German car companies, are worried that they will be “countermeasures” by China. Another survey shows that Chinese companies’ electric vehicle sales and investment enthusiasm in Europe have been impacted.
Recently, the European Union seems to have adjusted the tariffs on Chinese electric vehicles. It intends to increase tariffs on SAIC Group by 0.5%to 37.6%, and Geely Automobile has also lowered 0.1%. But from the perspective of downwardness, it feels very meaningful.
Coincidentally, Turkey and Brazil’s major car export destination countries have also adjusted tariff policies.
On the occasion of China’s automobile exports to a critical period, the global market competition pattern and the changes in tariff policies in various countries not only affect the current export sales, but also have a strategy of overseas market layout in the future.
Based on the EU, Turkey and other countries and regions, Getta Motors has compiled the tariffs in the TOP15 market in China, and it is more friendly to understand which country’s tariff policy is more friendly and suitable for recent investment. Although which markets have huge potential, they still need to be vigilant or temporarily abandon.
Export sales TOP15 market tariffs
According to data from Cui Dongshu, Secretary -General of the Federation of Federation, the total exports of Chinese automobiles reached 2.445 million in the first May of 2024, an increase of 26%year -on -year, and the average unit price was 19,000 US dollars (about 139,000 yuan). Among them, new energy vehicles were exported to 869,000 units, a year -on -year increase of 29%, and the average unit price was 22,000 US dollars.
The top 15 markets for car exports include Russia, Mexico, Brazil, Belgium, etc. Among the top 15 new energy export sales, 6 different countries and regions, including India, Uzbekistan, Germany, South Korea, Israel, and Indonesia.
The European Commission proposed that from July 4th, the temporary counter -subsidy tax of 17.4%to 38.1%of imported electric vehicles imported from China (currently a 0.1%to 0.5%of SAIC Group and Geely Automobile tariffs were reduced by TASA and Geely Automobile.
This decision not only triggers strong dissatisfaction in the Chinese political and business community, but also was opposed by some European car companies and member states. For example, the German Chamber of Commerce stated that the addition of Chinese electric vehicle tariffs could not protect EU companies. Hungary said that protectionism is not a solution.
Recently, the news of Canada also reported the news of collecting new tariffs on electric vehicles made in China, which seemed to be consistent with the action of the United States and the European Union.
The adjustment of these tariff policies will undoubtedly have a profound impact on Chinese automobile exports, especially in the field of electric vehicles.
Which market can be bold?
With the changes in major market tariff policies, Chinese car companies have actually adjusted their overseas layout strategically.
From the perspective of tariffs, for countries and regions with high tax rates, unfriendly attitude towards Chinese car companies, or limited market size, Chinese car companies can consider temporarily abandoning or evacuating, or choose to adopt a light asset model, or export through the CKD model and authorize to authorize Local dealers operate to avoid the situation of “compensating his wife and folding troops”.
Taking the Indian market as an example, although it is the third largest car consumer country in the world, its high tariff barriers and unfriendly attitudes towards Chinese investors (BYD’s application for joint venture to build a joint venture in the local area) makes Chinese car companies be cautious treat. From the perspective of sales, China ‘s exports to India in the first May of this year also had only 30,000 units, accounting for not a large proportion.
Although the U.S. market has great potential and consumers have strong buying capabilities, their attitudes towards Chinese car companies are equally unfriendly and have high investment risks. The Canadian market is also facing similar situations, coupled with the low sales of Chinese automobile exports in the country, and the significance of expanding investment in the local area is limited.
However, countries such as the EU and Turkey to increase tariffs on China, considering market potential and geographical location, and a friendly attitude towards Chinese enterprises (all supports real estate models) Plan for factory investment. Through localized production, high import tariffs can be avoided.
Turkey is more worthy of attention, and its superior geographical location has made it an ideal springboard for entering Europe, Africa and even the Middle East market. According to the Turkish Minister of Industry and Technology in June, he was negotiating with Chinese car companies such as BYD, Chery, SAIC, and Great Wall on the establishment of factories.
In the European market, Chinese car companies can also choose to build factories in EU member states that are friendly to China (both member states are exempt from car tariffs), such as Hungary and Germany. Hungary has become a place for European factories to build factories in BYD, Ningde Times, and Weilai due to its friendly policies and strong car industry foundations. Data show that as of now, Chinese companies have invested over 20 billion euros in Hungary’s automobile industry.
For the Russian market, although China’s auto exports have unique advantages, the challenges brought by new scrap tax policies and financial sanctions need to be cautious. As a springboard in the US market, its investment strategy also needs to be adjusted according to the US tariff policy.
At present, the investment markets that Chinese car companies can focus on are members of ASEAN (Thailand, Malaysia, Indonesia), Australia, South America and the Middle East. These areas may have a free trade agreement with China, or have an open attitude towards Chinese enterprises, and have greater development potential.
China and ASEAN countries have signed a free trade agreement. At present, some automobile parts and motorcycles have implemented zero tariffs on Chinese products, and the market is being further liberalized, and other products will gradually fall to zero tariffs within a certain transition period.
In the South American market, the two major markets of Brazil and Chile can focus on layout. Although Brazil has increased tariffs on electric vehicle, its scale and potential are still huge as South America’s largest economy and automotive market. Due to the free trade agreement signed with China, my country’s auto exports enjoy a 0%tariff discount. In addition, Chile is also the third largest automotive market in South America and has high investment value.
With its low tariffs and strong purchasing power of consumers in the Middle East, it is also an attractive investment destination.
In general, the globalization strategy of Chinese car companies should be to gain a foothold in several countries and regions with a good relationship with China and market potential first, and then gradually expand to other major markets such as Europe and Mexico. In the process, companies do not need to pursue their faces, but also strive to occupy the dominant position in two or three important markets, thereby being invincible in global competition.