China is flooding the European market with cheap cars

China is flooding the European market with cheap cars

European automakers are gearing up for a “frontal” attack on China as the country floods the European market with cheap vehicles. Chinese dominance extends across various industries, including the automotive industry, where Chinese products compete through extreme subsidies, putting German companies in distress. During his trip to China, Chancellor Olaf Scholz pointed out that competition must be fair, but did not mention any clear consequences for the imbalance in market conditions.

China's massive production capacity in the automotive sector allows Chinese manufacturers to produce up to 50 million vehicles per year, although current demand is only around five million new cars. The Chinese government has confirmed its commitment to the automotive industry as it is seen as a key industry for the country's economic recovery. Factories in China are already operating at the limit, exacerbating the challenges of overproduction and lack of domestic sales.

German automakers are being forced to sell their vehicles abroad as Chinese manufacturers flood the market with undervalued products. This leads to increased competition, particularly in the area of ​​electric vehicles, whose demand in Germany is declining due to the discontinuation of government subsidies. European countries are considering imposing tariff barriers on Chinese electric cars to protect their domestic manufacturers.

The EU Commission is discussing possible measures against Chinese overproduction in the automotive sector, while Chancellor Scholz advocates fair competition and compliance with environmental standards. European car manufacturers are preparing to assert themselves against overwhelming competition from China and ensure balanced competition in the market.