Chinese vehicle leading company eyes struggling German factories
Date
1/20/2025 6:42:10 AM
(MENAFN) Chinese officials and carmakers are reportedly considering purchasing Volkswagen factories in Germany that are slated for closure, according to a source familiar with Beijing's evaluation of the situation. The move aims to strengthen China's presence in Germany's automotive sector, particularly by producing electric vehicles (EVs) locally. This would allow Chinese manufacturers to bypass import tariffs when selling their cars within the EU.
In October 2024, the European Commission imposed higher tariffs of over 45% on Chinese EVs following an anti-subsidy investigation, prompting China to introduce retaliatory tariffs on EU products such as brandy and fuel-powered cars. China has also filed a complaint with the World Trade Organization (WTO), accusing the EU of engaging in trade protectionism.
Chinese investment in Germany spans multiple sectors, including telecommunications and robotics, with notable Chinese involvement in Mercedes-Benz. The decision to invest in Volkswagen's factories will likely depend on the stance of Germany's new government after elections scheduled for February 23.
Volkswagen announced plans to shut down at least three of its German factories, laying off thousands of workers and cutting wages by 10%. However, a deal with the IG Metall union will prevent involuntary layoffs and plant closures until 2030. The automotive industry in the EU has been struggling with declining demand and the shift towards green technologies.
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