China scares the rest of the world. The country’s automobile industry has experienced a real commercial and production boom. More and more brands are packing up their bags and looking abroad to expand their presence in the rest of the world. Europe, however, fears a wave of launches which could jeopardize the situation of local brands.
In this context, the new customs duties approved by Brussels entered into force on July 4. The measure should not have any particular impact on manufacturers, even if some, like XPeng, are starting to consider building a factory on European soil.
Last week, new customs duties on vehicle imports from China were activated. Every brand and every product is sensitive to a considerable increase in customs duties. The most extreme case is that of the SAIC group, which will have to pay up to 48.1% taxes on each new vehicle it sells in Europe.
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Other manufacturers, such as BYD, benefited from preferential treatment by cooperating in the European investigation. Although he provided data to investigators, XPeng was penalized with an additional tax of 20.8%, in addition to the 10% already existing to date.
China appears to be doing business as usual, even though Europe has cut profits
Although the new tariffs have already taken effect, Europe and China have given themselves until November to negotiate new agreements and new conditions. All brands want to continue business as usual. Car prices might change, but if they do, it will be very little.
While China appears to be continuing business as usual, many of its manufacturers are already starting to take steps to reduce or avoid these tariffs or those to come. XPeng plans to open a factory on the Old Continent.
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Building a factory is a slow and expensive process. While money may not seem like an issue, time is. On average, it takes 2 to 3 years for a factory to become active and operational. That’s too long for one brand, but even so, the investment may be worth it.
XPeng has promised to honor prices for all current customers, those who have reserved and those who are waiting for delivery. They won’t raise prices, at least for now. XPeng’s share in Europe is increasing thanks to interesting products such as the XPeng G6. More and more countries benefit from the company’s official participation, including France, where it will arrive before the end of the year.
For its part, NIO is also taking measures to mitigate the consequences of Europe’s defensive policies. The company is growing in Europe thanks to its public charging network and battery exchange stations.
The product offering is expanding and the first of its low-cost brands, Onvo, will arrive soon. In terms of models, we have units such as the NIO ET5 sedan and the latest NIO EL8. Like XPeng, NIO is confident that the tariffs will have little impact on its business in the short term, but the company is already working on a new strategic formula which envisages several possible actions, including the construction of a new factory in Europe.