Source: AFP
The chief executive of German luxury car maker BMW warned on Wednesday that a European Union investigation into Chinese electric car subsidies is at odds with free trade.
The EU launched the investigation last year, fearing that Chinese subsidies are a threat to Europe’s own huge car industry.
The move angered Beijing, sparking fears of a trade war between the bloc and the world’s second-largest economy.
Oliver Zipse — CEO of BMW, which has heavy investments in China, the world’s biggest auto market — said the Munich-based group “always fights for free trade.”
“What we’re experiencing today with the anti-subsidy investigation against China is exactly the opposite of what we expect,” he said during a call after the group reported a drop in first-quarter profit.
BMW’s warnings were unlikely to prevent the EU from imposing additional tariffs on Chinese carmakers, he said, but added that he hoped any such step would be temporary.
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“I would caution against doing this permanently — it would do far more damage to German industry,” he said.
He pointed out that many Chinese imports into Europe are made by non-Chinese manufacturers operating in the country, including German companies.
“You see how quickly you can shoot yourself in the foot,” he said.
According to the NGO Transport & Environment, almost 20 percent of all electric cars sold across the EU last year were made in China — but more than half of those were made by Western automakers.
BMW has a major production base in Shenyang, where it manufactures cars through a joint venture.
Zipse’s comments came as BMW Group, which also makes Mini and Rolls-Royce cars, said first-quarter net profit fell 19 percent year-on-year to 2.95 billion euros ($3.17 billion) due to of the highest cost.
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Sales fell 0.6% to 36.6 billion euros.
In China, the group sold nearly 183,000 BMW brand vehicles, down 4.1% from the previous year.
Germany’s auto giants in particular have invested heavily in China in recent decades. They were already struggling due to tough local competition, and the fallout from the EU investigation amounts to an additional headache.
If the EU concludes there are unfair practices, it could impose tariffs on Chinese carmakers above the standard EU rate of 10%, but Brussels could also decide to do nothing.
The investigation is one of several state aid probes directed at China by the bloc in recent times, with the EU accusing Beijing of flooding Europe with subsidized goods.
Source: AFP