So does this mean the EU will raise import tariffs on Chinese EV brands like GWM?
Great Wall Motor (GWM), a prominent Chinese automaker, has made the strategic decision to close its European headquarters situated in Munich, Germany. This move, set to take effect before 31 August 2024, will result in the dismissal of approximately 100 employees, as reported by Automotive News Europe.
The company cites the challenging market conditions as a primary factor behind this decision, coupled with the looming threat of punitive taxes on Chinese imports. While this is not news, what might be is the fact that the EU may potentially raise the tariffs on Chinese electric vehicles (EVs) soon, forcing GWM to make this decision.
Moreover, a spokesperson for GWM emphasised that the decision stems from a need to adapt to the evolving market dynamics, which include the significant uncertainty surrounding potential punitive tariffs. This uncertainty has necessitated a shift in the company’s operational strategy.
Despite the closure of its European HQ, GWM remains committed to serving the European market by supervising regional operations remotely. The company plans to continue selling its vehicles through local distributors in key markets such as Germany and the UK. Headquartered in Baoding, northern China, the brand has ambitious plans for European expansion.
On top of that, despite relatively modest sales figures on the continent, with only 1,621 vehicles sold in the first four months of the year, the company is exploring the possibility of establishing a manufacturing facility in Europe. Potential locations for this facility include Germany, Hungary, and the Czech Republic.
The decision to close the European HQ comes amid ongoing deliberations within the European Commission regarding the imposition of punitive tariffs on Chinese exports. The Commission is expected to communicate its intentions to Chinese brands by early June. Should punitive tariffs be imposed, they could take effect within a relatively short time frame, potentially impacting the competitiveness of Chinese automakers in the European market.
According to a report by Bloomberg on 22 May 2024, citing insights from the consulting firm Eurasia Group, the timing and extent of these tariffs remain uncertain. This uncertainty adds another layer of complexity for GWM and other Chinese brands as they navigate the evolving regulatory landscape in Europe.
We got all this from Tech Node and their full article is linked here. Thank you Tech Node for the information and images.
