“This will affect everyone”
BMW CFO fears tariff war with China
October 6, 2023, 5:52 p.m
Listen to article
This audio version was artificially generated. More info | Send feedback
The EU Commission sees the domestic car industry at risk from cheap electric cars from China and is examining new tariffs. The reaction from the Far East is likely to be equally harsh, believes BMW CFO Mertl – and thus have consequences for other industries.
BMW CFO Walter Mertl warns against the introduction of punitive tariffs on Chinese vehicles in the EU and fears countermeasures in the People’s Republic. These would probably have a greater impact than the punitive tariffs themselves, said Mertl. “This will affect everyone who does business in China.” History shows that it is often not just unilateral tariffs, but that there are often counter-reactions that have a much greater impact. Only companies that do not do business in the other country are protected. “But for all the rest, the backlash can be like a boomerang bigger than what was originally imagined.”
The EU Commission sees the domestic car industry at risk from cheap electric cars from China and is therefore examining anti-dumping tariffs. The investigation is expected to take a good year. The government in Beijing criticized this step harshly. The German Chamber of Industry and Commerce (DIHK) expressed concern about a trade war, and pleas for free trade also came from the automotive industry.
For BMW and the other German car manufacturers, China is now the most important single market; BMW is also exporting the iX3 from the People’s Republic to Europe, and the electric Mini will be added next year. According to the experts at Bernstein Research, the French car manufacturers Renault and Stellantis would be the winners of the EU initiative because they would benefit from less competition on the European market. At the same time, the risk of suffering from countermeasures is lower because they hardly do any business in China.
Mertl expressed confidence about business in China. In the first half of the year, sales increased more than the market as a whole, and it looks as if BMW is continuing to develop better than the overall market. “Our incoming orders in Europe are positive, especially for electric cars.” Overall, sales worldwide are likely to have increased by more than five percent in the third quarter and the first nine months. “We will be able to present good numbers,” emphasized Mertl. BMW will present its third quarter figures at the beginning of November. In the summer, the Munich-based company raised its forecast for sales and returns.