Chinese officials and automakers are showing interest in acquiring German factories, particularly Volkswagen's sites, according to a source familiar with Chinese government perspectives. Acquiring a factory would enable China to establish influence in Germany's esteemed auto industry, known for hosting some of the most prominent car brands globally.
Despite having investments in various sectors in Europe's largest economy, Chinese companies have yet to establish traditional car manufacturing in Germany. Buying factories in Germany would allow Chinese electric vehicle (EV) manufacturers to avoid EU tariffs on electric cars imported from China, potentially posing a threat to European manufacturers' competitiveness in the region.
While bids could originate from private companies, state-owned enterprises, or joint ventures with foreign partners, Chinese authorities are likely to be part of the approval process for such investments abroad. The decision to invest would depend on the new German government's attitude towards China following recent political shifts.
Volkswagen is exploring options for its Dresden and Osnabrueck factories due to a decline in sales, contemplating selling the Osnabrueck plant to a Chinese buyer. Regarding potential concerns about German unions, union representatives have indicated willingness to produce for a Chinese joint venture under Volkswagen's standards.
Chinese investors are keen on Germany's car sector as a strategic long-term investment opportunity, aiming to win over German consumers and secure a place in Europe's EV market. Selling factories might be a cost-effective alternative for Volkswagen compared to plant closures, potentially fetching between 100 million euros and 300 million euros each.
Several Chinese carmakers are investigating plant locations in Europe, including in Germany, aiming to tap into the region's strong EV market while bypassing EU tariffs. Companies like BYD and Chery Auto are considering different options for European production, with Leapmotor eyeing a German plant for EV production.
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