"European car production is decreasing, with most new cars being manufactured in China." According to a report by Bloomberg on June 19, as the Chinese automotive industry grows, Chinese automakers are gaining more influence in Europe. European traditional car manufacturers are facing decline. Some European countries, such as Spain, hope to take this opportunity to learn advanced Chinese technologies and attract more investment.
In the suburbs of the French city of Le Havre, a car factory that began production in the 1960s has been manufacturing Citroën cars. However, as Stellantis, the parent company of Citroën, strengthens its cooperation with Chinese companies, this factory is expected to begin manufacturing vehicles for Dongfeng Automobile in China starting from 2028. The boundary between “European manufacturing” and “Chinese manufacturing” will become blurred.
Such changes have become a reflection of the European automotive industry. Reports indicate that Europe is gradually losing its dominance in the automotive sector, while Chinese automakers are gaining increasing influence in Europe. Stellantis also plans to cooperate with Chinese companies to produce cars in France, Spain, and Italy. The group hopes to leverage China’s advanced technology to support the models of European brands such as Opel, Citroën, and Fiat.
Many traditional European automobile companies are facing difficulties. For example, the German BMW Group expects to barely maintain profitability this year and plans to reduce costs further to ease pressure, which may lead to layoffs. The Mercedes-Benz Group also plans to discuss cost reduction issues with labor representatives and may introduce new savings measures on top of the existing labor agreements.
Volkswagen Group CEO Oliver Blume said to shareholders on the 18th: "Developing ‘world-class cars’ in Germany, producing them in Europe, and selling them globally—this business model that has been successful for decades is no longer effective."
Bloomberg noted that this indicates that traditional automotive powerhouses like Germany and France are significantly behind China in terms of electric vehicle technology and software.
The BYD factory being built near Szeged, Hungary. Bloomberg.
Philip Gilleron leads a committee composed of representatives from various Straitis unions across Europe. He said bluntly, "When you lose your technical knowledge, it's almost impossible to make a comeback. It's as if someone is constantly cooking for you, and in the end, you won't be able to cook anymore."
Chinese automakers' influence in Europe continues to grow, and European countries have different reactions. Some countries are concerned that Chinese automakers entering the European market could disrupt the European automotive industry. Others believe that it is possible to learn advanced technologies from China through cooperation, while also ensuring the employment of European car workers.
In Italy, some industry insiders are worried that the growing influence of Chinese automakers could lead to the decline of Italian famous car brand Fiat. Fiat merged with Stellantis in 2021 and has been working towards diversification for many years, aiming to reduce competition in the automotive market. Cooperation with China could help the company reduce risks and avoid factory closures.
The government led by Italian Prime Minister Meloni is open to Chinese investment, but the Italian automotive industry is concerned about the prospects. Samuele Lodi, national secretary of the Italian Metalworkers' Union (FIOM-CGIL), said: "In the short term, it will be difficult for European manufacturers to challenge the technology that Chinese automakers have accumulated in the field of electric vehicles. This is the result of political choices, planning, and investment, but Europe and Italy lack these elements."
France is trying to promote the so-called 'European manufacturing' agenda, aiming to restrict the expansion of China's automotive industry in Europe. Germany, on the other hand, finds itself in a difficult position, struggling to balance the need to protect European industries with the acceptance of Chinese investments.
German Finance Minister Christian Mueller said: "The goal of the German government is to strengthen the automotive industry in the future. This is often an emotional debate, but the automotive industry is of great importance in Germany. Therefore, our government must always maintain a careful balance."
In contrast, Spain is more welcoming to investments from Chinese automakers. Spanish Prime Minister Sánchez has visited China four times in an effort to attract more investment.
Spain has established three partnerships with Chinese companies: CATL is collaborating with Stellantis to invest 4.1 billion euros in building a battery factory in Zaragoza; Chery Automobile is partnering with Spanish EV MOTORS to establish a factory for assembling cars locally; and the Spanish car brand Santana Motors is working together with Dongfeng, BAIC, and Anhui Carrot among others to restart its factory in Linare.
Bloomberg pointed out that there is still fierce competition within the EU. Countries like Spain see opportunities to attract investment and replace German technology with Chinese technology.
Santana Motors CEO Eduardo Branco believes that cooperation could provide an opportunity for Europe to regain access to technology. He stated, “For years, China has learned from European partners. Now, we need to do the same: learn from them. The industry needs to think about what cars will look like in 20 years, not about ‘I must catch up and beat them,’ because that's impossible.”
