Europe faces storm as Chinese electric cars gain ground
When questioned about new competition from China during the Paris Motor Show, Linda Jackson, CEO of Peugeot, emphasised that she treats the Chinese like any other competitor. She highlighted that each brand must strive to earn the leader's position by winning drivers' trust.
"I treat the Chinese like any other competitor, full stop. We want to be leaders, and we can't be arrogant; we must earn that position ourselves," said Linda Jackson.
Chinese brands are entering Europe with significantly cheaper cars, often matching their European counterparts in design, technology, and quality. However, the EU accuses them of achieving this through government subsidies in Beijing. The expansion of Chinese manufacturers in Europe is part of Xi Jinping’s plan.
"I have a lot of respect for each of our competitors. I’ve been in this industry long enough to remember when the Japanese entered the European market, followed by the Koreans. And what? There's room in the market for everyone, and everyone finds success. Now the Chinese are coming, they've been working on the right offer. Ultimately, it all comes down to trust in the brand," added Jackson.
How can European brands beat the Chinese?
Jackson emphasised that from the perspective of automotive brand managers, defining what makes them stand out from others is crucial. "And I believe Peugeot's message is very clear and strong: design and uniqueness. We know from research that the two main reasons customers choose Peugeot are indeed external and internal design. Secondly—technology. The electric SUV e-3008 has a maximum range of around 700 kilometres, the best in its class," she explained.
The European Commission has recognised the real threat posed by cheap cars from China to European manufacturers. In early October, EU countries agreed by the required majority to impose punitive tariffs on them. A decision on this matter could come as early as this Friday.
"The issue of tariffs is one thing, but at the end of the day, it really depends on us whether we gain trust and interest from customers," asserted Jackson. In 2023, Peugeot sold 1,124,268 new cars.
The European Commission stated that China subsidises the production of electric vehicles, allowing them to sell cars at artificially low prices. This raised concerns in the EU forum that the European automotive industry could become another sector unable to cope with unfair competition from China.
Countries opposed to the imposition of tariffs on Chinese electric cars at the time were: Germany, Hungary, Malta, Slovenia, and Slovakia. Countries that abstained were Belgium, Czech Republic, Greece, Spain, Croatia, Cyprus, Luxembourg, Austria, Portugal, Romania, Sweden, and Finland. The EU's decision has already met with a reaction from Beijing—tariffs on brandy, particularly affecting France. Experts warn this may be just the beginning of a trade war.
Brussels negotiates with Beijing
On Monday, European Commission President Ursula von der Leyen met in Berlin with German Chancellor Olaf Scholz. The talks included discussions on tariffs on Chinese cars. The Berlin government opposes their imposition, fearing retaliatory actions in the Chinese market against German car manufacturers. Brussels continues to negotiate with Beijing.
"What could be the compensation that is offered instead of countervailing duties, for example? And there is the question of price commitments that are on the table, investments in Europe," said Ursula von der Leyen on Monday in Berlin. She announced that even if tariffs are imposed, negotiations will continue.
Meanwhile, Carlos Tavares, CEO of Stellantis, warned in an interview with Reuters that imposing tariffs will prompt Chinese car manufacturers to set up factories in Europe, which would only increase overcapacity in the region and lead some local manufacturers to close factories.
The Chinese have done their homework, now they are conquering Europe
Let us recall that data from the European Automobile Manufacturers' Association (ACEA) shows that in 2019, cars from Chinese brands accounted for 0.4% of new "electric" sales in the European Union. In 2020, this share rose to 1.4%, the next year to 1.7%, and by the end of 2022, it reached 3.7%. According to the European Commission, by 2025, this share will reach 15%.
Peugeot is part of the Stellantis group, which was formed by merging the Franco-German PSA Group and Italian Fiat Chrysler Automobiles. It includes brands like Opel, Peugeot, Jeep, Fiat, and Maserati. Stellantis has formed a joint venture with the Chinese brand Leapmotor and intends to sell these cars in Europe. Although it has not officially confirmed this, Stellantis is already manufacturing the first Leapmotor cars.
