France seeks to protect itself against the surge of Chinese cars

The Minister of the Economy Bruno Le Maire announced Monday morning measures to support the automobile industry, in particular the maintenance of the bonus on new electric cars produced in France. A way to counter the Chinese surge.

The tidal wave on Europe promises to be violent because when it comes to cars, China produces, even overproduces, to the point that its domestic market is saturated. Chinese consumers only absorb two thirds of the 30 million vehicles that China builds each year, half of which are electric. Chinese manufacturers therefore find themselves with large stocks and the ideal place to sell them is Europe, because the United States has closed its borders to Chinese imports.

Thus, to protect our automobile industry and its 350,000 jobs, the government is implementing several measures, including environmental criteria on bonuses. The objective is to encourage consumers to favor “made in France”. The Minister of the Economy Bruno Le Maire announced these measures on Monday May 6 in the morning.

Chinese manufacturers on the lookout for European customers

Brands like BYD and MG send whole containers of cheap cars, which park in European ports. Last week, at the Beijing motor show, most Chinese brands presented small, hyper-competitive city cars priced at less than 20,000 euros. Models to directly compete with those of Renault or Stellantis.

And moreover, France is seeking to attract Chinese factories to France. That’s the paradox. To avoid transport costs, Chinese manufacturers are setting up factories in Europe. BYD has announced a future site in Hungary. So the French reasoning is simple: since these brands come to the continent anyway, they might as well convince them to choose France, that will create jobs.

Visit of Xi Jin Ping to Paris

The discussions between Emmanuel Macron and Xi Jin Ping will certainly focus on the subject, alongside problems linked to Russia. The automobile is the symbol of the economic war between the European Union and the Middle Kingdom. Especially since the Chinese are very annoyed by the Brussels investigation into suspicion of unfair competition on electric vehicles. Europe accuses China of supporting its manufacturers with massive subsidies. And for Beijing, France is at the origin of this investigation.

In addition, Brussels is considering raising taxes on imports of Chinese cars. As retaliation, the Chinese are already threatening to overtax products exported to China, notably alcohol and French cognac. The standoff is far from over.