By Vivek Dubey
CNBC-TV18.com
Published June 25, 2024
China's counter-tariffs on European EVs threaten European carmakers. Proposed tariffs up to 38.1% could disrupt their market presence significantly.
German carmakers like Volkswagen and BMW face high risk. Nearly a third of their 2023 sales came from China, exposing them to counter-tariff impacts.
Porsche, majority-owned by Volkswagen, has no local production in China. Importing all cars sold there, which make up 25% of global sales, it’s highly exposed.
High-end models from Porsche and Mercedes-Benz, despite being only a small percentage of total sales, carry significant profit margins, magnifying the impact.
Despite its vulnerability, Porsche’s luxury branding might allow it to raise prices to offset tariffs. However, sales in China dropped 24% in early 2024.
With only 2.5% of its Chinese sales being imports, VW's exposure is lower. Yet, it aims to maintain a market share of 14.5%, making counter-tariffs potentially damaging.
China is Mercedes-Benz's largest market, with 36% of sales. Despite 80% of its cars being made locally, the imported high-end models face significant tariff threats.
BMW, generating nearly a third of its sales in China, imports 13% of its vehicles. Its joint ventures produce cars locally, but high-end imports like the 7 Series are at risk.
Volvo, owned by China’s Geely, produces most cars locally. Only 4% of its Chinese sales are imports, lessening tariff impact, but a quarter of its sales are in China.
Stellantis has minimal exposure in China, while Ferrari imports all its sales there, making up 9% of global sales. Ferrari might leverage its brand to offset tariffs.
Renault, operating through joint ventures, has minimal exposure in China. Its Dacia Spring EV is made locally, and a new venture with Geely aims to develop engines.