Mercedes-Benz Group Chairman, Konrad Zons, opposes the EU Commission’s plan to increase import tariffs on Chinese electric cars. In a recent interview with the Financial Times, Zons said that protectionism is “going the wrong way” and called for no increase in tariffs on imported cars from China.
He added that Chinese companies selling cars in Europe is “the natural development of competition, requiring better products and better technology. This is the market economy, let the competition begin.” The European Commission is now investigating whether Chinese car manufacturers are receiving subsidies from the Chinese government, allowing them to lower car prices exported to Europe, thus weakening local manufacturers in Europe. With brands like BYD already making a name for themselves on the world stage and taking market share from traditional car giants, the latter’s anxiety is gradually becoming apparent. French car manufacturers Stellantis and Renault, which have almost no car business in China, have been promoting the “China electric car threat theory” extensively. Now, the investigation is strongly opposed by German car manufacturers, as a large part of their sales and profits rely on the Chinese market.
In the eyes of industry professionals, the executives of these German car companies are worried about “retaliation” from China. Public data shows that one-third of Mercedes’ global sales come from China, and this figure reaches 40% for Volkswagen. Geely Holding Group and BAIC Group together own 20% of Mercedes. Karl-Thomas Neumann said, “Our company is not seeking trade protection, and I believe the best Chinese companies do not need protection. They want to compete globally like everyone else.” He believes that China has always had an open market, which has led to its economic miracle. “History tells us that trade protection cannot help us maintain long-term advantages.” Neumann pointed out that everyone needs a “fair competitive environment,” and both sides should “strive for a win-win economic situation, but if we seek wealth through increased protectionism, we are on the wrong path.” Compared to their German competitors, Stellantis and Renault are facing a more difficult situation in China, so the French government is actively seeking measures against Chinese companies. Stellantis CEO Carlos Tavares warned last year that 13 million people in Europe are employed in the automotive industry, and this huge industry is being “eliminated” by China – just like the solar panel industry once was. In this matter, Tavares is in the minority, as more people have realized that using tariffs as a threat will not work. Forbes commented, “If the EU does indeed increase tariffs on Chinese imports, the consequences will be serious. Chinese companies can bypass the tariffs by building factories locally in Europe, which would be an even more devastating blow to the already inefficient local factories in Europe.”