July 29

Europe faces Chinese cheap car ‘invasion’, Vauxhall owner warns

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Vauxhall owner Stellantis has warned of a coming “invasion” of cheap Chinese cars as it pressures its suppliers to cut costs to compete.

The firm, which also owns Peugeot, Fiat and Jeep, will also use its heft to demand lower prices from partners as it tries to bring down the cost of electric cars.

Chief executive Carlos Tavares, who has been outspoken before on the high cost of battery-powered cars and the risk they pose to the mass ownership of cars, said suppliers should prepare to comb over their businesses and cut costs as he has done.

He said Stellantis faces a “brutal scenario” where it must compete with Chinese-made cars which are a quarter less expensive while having to invest billions into electrification. Mr Tavares told a French radio station that China’s export ambitions amounted to an “invasion”.

Chinese carmakers are targeting European markets including the UK with predominantly electric cars, undercutting companies like Volkswagen and Stellantis.

Big firms including Warren Buffett-backed BYD; Chery, which makes Land Rover models in China; and Great Wall through its Funky Cat brand plan to sell their cars in the UK.

Europe has plans for many gigafactories, but less than a dozen are up and running compared to more than a hundred in China. Beijing’s investments in lithium mining and refining also put it in an advantageous position, while European countries play catchup.

Still, Mr Tavares’ cost cutting efforts helped propel Stellantis profit for the first six months of the year to €10.9bn from €8bn a year ago and sales rose 12pc to €98bn.

Meanwhile, larger German rival Volkswagen announced a $700m investment in Chinese electric vehicle maker Xpeng in a bid to revive its sales fortunes in China.

Volkswagen brought car making to China and has long been the top seller in the country, but it has been losing market share in recent years to local upstarts.

Volkswagen wants the pair to develop two battery models by 2026. It also said its Audi brand would do a deal with SIC, a state-owned carmaker to develop new models, with more details to be released in due course.

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Source: Msn.com

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