Italy awaits Dongfeng, Chery arrives in Spain: the Chinese electric car takes root in the EU

Chery will soon produce cars in Barcelona, ​​​​​​​​in the old Nissan factory. The announcement came on April 14 from the Chinese carmaker’s president, Yin Tongyue, confirmed two days later by the Catalan government. After BYD, which in December last year officially opened a new factory in Szeged, southern Hungary, Chery is the second major Chinese car maker to accelerate production in the European Union.

On Friday, April 19, the details of the joint venture between Chery (which will have a small stake) and EV Motors of Spain (which bought the plant from Nissan, which has been closed since 2021) will be revealed during a ceremony in Barcelona. The deal should allow 1,600 former Nissan employees to continue their jobs.

Chinese investment in Spain is very different from that of Hungary: in the first case the main actor is a state company, in the second a private company; Chery is still limited to internal combustion engine and hybrid cars, BYD only makes electric and hybrid cars; that of the Wuhu manufacturer is a less ambitious project compared to the brand new factory that the Shenzhen multinational is building in Szeged (on the border between Hungary, Serbia and Romania), which should be launched in the second half of 2025 and emerge. 200,000 electric cars per year.

The substance, however, is the same: the big Chinese manufacturers have moved seriously to privatize the production of electric vehicles within the European Community, for several reasons:

• The EU is a rich, open market, and which – according to the obligation, from 2023, to sell only new cars with new energy – the demand for electric cars is constantly increasing;
• Due to costs, supplies and trade tensions, it is difficult for China’s exports to keep up with the increase in demand from the European Union;
• The investigation launched in October 2023 by the Commission could lead to an increase in customs duties in the EU, currently at 10 percent, up to 25 percent.

According to the latest rumors, to develop its “made in EU” cars, the Chinese state-owned company would use the E0X platform, the one used for the Luxeed S7 developed by Chery and Huawei. In Barcelona, ​​​​​​​​Chery would immediately start producing models of its Omoda brand, while Spain’s EV Motors would follow, releasing its own from the fourth quarter of this year.

Chery’s sales more than doubled in 2023 to 937,148 vehicles, accounting for nearly half of its annual sales. In the first quarter of this year, they reached 253,418 units, a year-on-year increase of 40.9 percent. President Yin revealed that Chery plans to introduce 24 hybrid and 15 fully electric models in the next 20 months.

Italy, on the other hand, considers Dongfeng as a partner to support Stellantis. Talks with Industry Minister Adolfo Urso are ongoing and, according to what has been leaked, Meloni’s government will offer Dongfeng several options for production sites in the coming weeks.

At the same time, Qian Xie – the head of Dongfeng for Europe – confirmed that discussions are ongoing “at an early stage with the Italian government”, adding that “Italy is one of the largest European car markets and for the Chinese car manufacturer to be and domestic production. It means being able to supply all the other countries in the region.”

The Wuhan state-owned company will be ready to produce more than 100,000 cars a year in Italy. However, we must overcome, among other things, the opposition of Stellantis, with whom Urso quarreled. In recent days the CEO, Carlos Tavares, threatened that he would have to make “unpleasant decisions” if the Chinese electric car maker were to set up shop in Italy.

Like Chery, Dongfeng is a manufacturer that is still limited to traditional cars and the domestic market (it is not among the top ten Chinese car sellers). After peaking in 2017 with 2.83 million deliveries, Dongfeng’s sales fell to 1.72 million last year, a 38% decline.

*Yes China assessment

April 24, 2024 – © May be reproduced WITH THE EXPRESS CONSENT OF THE CONTROPIANO EDITORIAL TEAM

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