Factbox: European carmakers exposed to any Chinese retaliation for EU tariffs

Brilliance China Automotive Holdings

13/06/2024 17:18

June 13 (Reuters) - The European Commission will apply
additional duties of up to 38.1% on imported China-made electric
cars from July, a move that Beijing is likely to retaliate
against. 
    Europe's auto industry had warned against imposing the
tariffs, with German carmakers the most exposed to any counter
moves as almost a third of their sales came from China in 2023,
trade data shows. 
    Other continental automakers have largely divested their
China businesses, but could be indirectly affected through their
investments. 
    Below are the brands with exposure to China:
    
    MERCEDES-BENZ  MBGn.DE  
    China accounts for a third of unit sales and just under one
in five of the company's cars sold there is imported from
Germany, according to the premium automaker's full-year results.
    It exports top-end models like the S-Class and Maybach to
China, while its mid-range models are produced locally. 
    Retaliatory tariffs on German-made cars could therefore have
a disproportionate impact on profit, ODDO BHF analyst Michaël
Foundoukidis said, unless they were offset by higher prices. 
        
    BMW  BMWG.DE 
    BMW generates nearly a third of unit sales in China but
according to its annual report only 13% of those come from
imported cars, mainly high-end vehicles.
    It holds a 75% stake in a joint venture with China's
Brilliance Automotive  1114.HK  which produces cars for the
German group to sell in China, and also the electric iX3 for
export to Europe, which will fall under the scope of EU tariffs.
    Another joint venture with Great Wall Motor Co  601633.SS 
produces electric versions of the Mini Cooper and Mini Aceman in
China to export globally, with Europe-bound vehicles liable for
the tariffs.  
    
    VOLKSWAGEN  VOWG_p.DE 
    Volkswagen holds the biggest share of the Chinese market
among foreign companies with 14.5%, where it makes around 30% of
its sales.
    Localising production has lowered sales of imports from
Germany to just 2.5% of its China sales, excluding Porsche,
according to its full-year statement.
    It aims to increase its market share to 15% by 2030 and
reduce costs by 40% to better compete with Chinese competitors.
    BMW and Volkswagen, which has a joint venture with SAIC
Motors  600104.SS  producing EVs in Shanghai, in April pledged
more than $5 billion to expand research and production in China.

    PORSCHE  P911_p.DE  
    The Volkswagen-owned luxury carmaker is highly exposed with
21% of its sales coming from China in the first quarter, all of
which are imported vehicles. 
    However, the premium sector has the advantage of having the
highest pricing power to pass tariffs on to consumers, HSBC
analysts said in a June 6 note. 
    
    VOLVO CAR  VOLCARb.ST 
    The Swedish carmaker, majority-owned by China's Geely
 0175.HK , generates a quarter of its unit sales in China but
only around 10% of its profit, HSBC analysts said.
    Sales of imported vehicles make up about 4% of Volvo's
Chinese sales with a focus on local production. 
    However, it started to shift some EV production to Belgium
ahead of the EU tariff decision, The Times reported earlier in
June.
    
    STELLANTIS  STLAM.MI 
    The Franco-Italian group has one of the lowest regional
exposures to China, mainly from its recent investment in
Leapmotor  9863.HK , with which it plans to export two EV models
from China by year-end.
    
    FERRARI  RACE.MI  
    Like other luxury carmakers, all Ferrari's sales in China
are imports, although at just 9% of total sales, it has the
lowest regional exposure, HSBC analysts wrote.
    Stellantis-owned Ferrari could also leverage its pricing
power to pass on tariffs to customers.
    
    RENAULT  RENA.PA  
    The French automaker has the smallest exposure to China,
where it operates through joint ventures with Jiangling Motors
 000550.SZ  and Brilliance Auto, and with Nissan  7201.T  which 
has a market share of roughly 3%.
    Its Dacia Spring EV is manufactured in China by local
partner Dongfeng  0489.HK .
    Renault and China's Geely announced a joint venture in May
to develop combustion and hybrid engines, hoping to improve the
competitiveness of their legacy auto business.

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China urges EU to reverse 'wrong practices' on EV tariffs   
 urn:newsml:reuters.com:*:nL1N3IA1HI
INSTANT VIEW-EU to impose duties of up to 38% on Chinese
electric vehicles     urn:newsml:reuters.com:*:nL1N3IA0NS
FACTBOX-China-based EV makers hit with European Union tariffs   
 urn:newsml:reuters.com:*:nL1N3IA0HO
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 (Compiled by Isabel Demetz and Eva Orsolya Papp in Gdansk;
Editing by Milla Nissi, Kirsten Donovan)
 ((Isabel.Demetz@thomsonreuters.com;))