China incites its carmakers to curb investments in Europe
- The Chinese government seems to be reviewing its strategy on the development in Europe of Chinese carmakers under its control. It is said to have incited the interruption of discussions on new projects and the refusal to sign new agreements. The message was well received by Chinese public carmakers, such as Dongfeng, which has just announced that it was pausing its factory project in Italy. Several parameters have been highlighted by the Chinese government:
1. Chinese electric cars are facing strong opposition from certain European governments.
2. Sales of Chinese cars are not reaching the level hoped for in Europe. Despite their competitive price compared to their similar European competitors and despite their other intrinsic qualities, they are struggling to convince the European customer, their market share (all engine market) not reaching 3% in 2024, marking very little progress compared to 2023. The 10% market share predicted by Inovev in its studies is still a long way off.
- At the same time, a 10% market share of Chinese carmakers in Europe in 2030 would inevitably lead to a drop in sales of 1.5 million cars by traditional European brands (and also Japanese and Korean brands), which would lead to factory closures and brand closures.
- For the Chinese government, the European market remains a complex one, with tastes and needs that vary from one country to another. The Chinese government could therefore favour the development of its carmakers rather outside Europe, such as in Turkey, South America, Australia, South-East Asia and the Middle East, where these carmakers are already enjoying some success.