Zhong Guo Qi Che Bao Wang·2025-07-23 01:24Core Insights - Chinese automotive companies are increasingly localizing production in Europe to mitigate tariffs and enhance market presence, with Changan Automobile planning to establish a factory in Europe [2][4][5] - The EU's recent decision to impose a maximum 35.3% anti-subsidy tax on electric vehicles produced in China has accelerated the need for local production among Chinese automakers [4][5] - Despite tariff challenges, Chinese car brands have seen significant sales growth in Europe, with a 110% year-on-year increase in May, reaching nearly 66,000 units sold [5][19] Localization Strategy - Local production helps avoid tariff barriers, reduces trade friction, and enhances brand recognition within the European automotive ecosystem [3][4] - Key factors for site selection include proximity to core consumer groups, local supply chain capabilities, government subsidies, and the availability of skilled labor [2][9][10] Market Dynamics - The market share of Chinese electric vehicle brands in Europe has risen to 5.9%, up from 2.9% a year earlier, indicating strong demand despite tariff pressures [5][19] - Major Chinese brands like BYD, Changan, and Geely are actively pursuing local production strategies, with BYD's factory in Hungary and Changan's plans for a new facility [2][4][5][12] Investment Approaches - Chinese automakers are employing different investment strategies, including "greenfield" investments (new factories) and "brownfield" investments (acquiring existing facilities) [6][9][16] - Hungary is emerging as a favored location for Chinese investments due to its favorable policies, established automotive supply chain, and strategic geographic position [10][11][12] Future Outlook - The ongoing negotiations regarding electric vehicle tariffs between China and the EU may lead to a shift towards a "minimum pricing" mechanism, potentially easing market entry for Chinese brands [6][19] - The long-term prospects for Chinese automotive companies in Europe remain positive, with expectations of continued growth and expansion despite current geopolitical and economic challenges [19]