China's BYD nears decision on second European plant, adviser says (updated)

Volkswagen AG

Today 09:32

BYD 'close' to deciding on second European site, adviser says
Spain and France are candidates for brownfield investment
Recasts with comments on second European production site, adds comments in paragraphs 2-4, 9
By Christoph Steitz and Rachel More

    FRANKFURT, July 1 (Reuters) - China's BYD 002594.SZ, the world's largest electric vehicle maker, is close to a decision on taking over an existing European auto plant to speed up its expansion in the region, a senior adviser said on Wednesday.
"The call needs to be made very soon," Alfredo Altavilla, BYD's special adviser for Europe, told the Reuters Automotive Europe conference in Frankfurt, referring to proposed EU 'Made in Europe' rules aimed at boosting local manufacturing.
Altavilla said Spain and France were candidates for brownfield investments, involving the acquisition of an existing factory from a traditional automaker, with a decision expected soon.
"This week, we have two teams looking around in different jurisdictions, so we're close," he said, questioning the competitiveness of German manufacturing sites, which are also struggling with underutilisation.
His comments come as established automakers seek ways to address overcapacity while investing heavily in product development and technology such as batteries and software.
Stellantis STLAM.MI holds majority stakes in joint ventures with China's Dongfeng 600006.SS and Leapmotor 9863.HK, part of efforts to boost production at sites in Spain and France.

'BLOODY USELESS' TO FIGHT CHINESE COMPETITION
BYD's sales in Europe leapt 270% last year to nearly 188,000 vehicles and more than doubled in the first five months of this year to above 100,000.
Taking over an existing plant would give BYD a second European assembly site after Hungary, where production is due to begin in the fourth quarter, underscoring Chinese automakers' push into the European market.
"Fighting that invasion is bloody useless," Altavilla said, adding plans by Volkswagen VOWG_p.DE to step up cost cuts were the "first real wake-up call" for Europe's auto industry.
Hit by tariffs, rising costs and intensifying competition from Chinese rivals, Volkswagen is considering its largest-ever restructuring, including 100,000 job cuts and the closure of four German factories, sources told Reuters last week.
Altavilla criticised the view that Chinese manufacturers entering Europe would be willing to take minority stakes in joint ventures while providing their latest technology.
"This is not coexistence. This is brutal violence," he said.

 (Reporting by Christoph Steitz and Rachel More. Editing by Thomas Seythal and Mark Potter)
 ((rachel.more@thomsonreuters.com))