The European Commission has decided to impose additional duties on imported China-made electric cars from July, which could have a significant impact on various European automakers. German carmakers such as Mercedes, BMW, Volkswagen, Porsche, and Volvo are among those who could be affected by these tariffs. While some companies have already divested their China businesses, they could still be indirectly impacted through their investments.
Mercedes-Benz, for example, has a strong presence in China, with a third of its unit sales coming from the country. The company exports luxury models like the S-Class and Maybach to China, which could be subject to retaliatory tariffs. BMW, on the other hand, generates nearly a third of its unit sales in China but only 13% of those come from imported cars. The company has joint ventures in China to produce vehicles for both the local market and export.
Volkswagen, the largest foreign automaker in China, has localized production to reduce its reliance on imported cars from Germany. The company aims to increase its market share in China and lower costs to compete with local competitors. Porsche, another Volkswagen-owned brand, is highly exposed to China, with 21% of its sales coming from the country. However, the luxury sector has more pricing power to pass tariffs on to consumers.
Volvo, majority-owned by China’s Geely, generates a quarter of its unit sales in China but only around 10% of its profit. The company has been focusing on local production to mitigate the impact of tariffs. Stellantis, the Franco-Italian group, has low exposure to China but plans to export EV models from the country. Ferrari, a luxury brand, has the lowest regional exposure to China among the automakers mentioned.
Renault, the French automaker, has the smallest exposure to China but has joint ventures in the country to manufacture vehicles. The company recently announced a partnership with China’s Geely to develop combustion and hybrid engines. Overall, the European automakers are bracing for the potential fallout from the Chinese trade war and are taking steps to mitigate the impact on their businesses.
