In a bold move to counter domestic profitability challenges and global trade barriers, nearly 900 Chinese auto suppliers and several EV manufacturers are showcasing their products at a Frankfurt trade fair.
What Happened: Chinese automakers like BYD BYDDY BYDDF, Geely GELYF, Hongqi, and GAC International are set to present their vehicles at the Automechanika fair. This marks a new trend for the event, which has traditionally been a platform for suppliers.
Despite the emergence of trade barriers in Europe and North America, aimed at limiting the influx of China-made EVs, China’s auto sector continues to invest heavily in overseas expansion. The “EV Expo”, which opens on Tuesday, was established in partnership with the China Council for the Promotion of International Trade.
Automechanika’s director, Olaf Musshoff, expressed at a press conference, “We want EVs made by Chinese carmakers which are currently to some extent unknown to gain trust in the industry.”
Moody’s data shows that the auto sector’s share of China’s total outbound investments rose from 16% in 2018 to 22% in 2023, and car exports have hit record highs this year. The significant presence of Chinese suppliers at the fair, almost double the number of German suppliers, highlights their expanding role in the global supply chain. Chinese automakers are increasingly planning local production in Europe and other regions to circumvent trade tariffs limiting imports.
Why It Matters: The Chinese auto industry’s move to expand globally comes in the wake of European Commission’s additional tariffs of up to 37.6% on EV imports from China in July. The tariffs were a response to concerns that state-subsidized, cheaper EVs from China could push domestic players out of the market. The EU’s steps are similar to the ones taken by the U.S. and Canada to restrict access of Chinese EVs into these markets.
In response to these tariffs, Chinese EV manufacturers began exploring Africa as a potential market. However, China also voiced strong opposition to these tariffs in August, labeling them as "unfair" and assuring its commitment to safeguard its EV industry against such actions.
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Photo via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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