Chinese carmakers, facing a European Union import quota targeting their hybrid electric vehicles (EVs), are gearing up for more local production to reinforce their go-global drive.
They plan to either splash out billions of yuan to set up their own factories or tap international marques’ idle plants to build their vehicles, looking to sustain a sales boom in one of the world’s major automotive markets.
“Global growth shifts from exporting vehicles to Europe to producing them locally, from price-led market share gains to margin-led positioning, and from a single export channel to a multimarket footprint,” Morgan Stanley analysts said in a research note issued last week after Beijing and Brussels agreed on an import quota for Chinese-made hybrid vehicles.
“Such a development would favour Chinese EV leaders with the scale, balance sheets and European manufacturing plans already in motion to pivot quickly.”