China threatens German car production, IW study shows

BERLIN - Imports of Chinese cars and car parts into Germany rose 75 percent in the first half of the year, even as overall imports from China fell. Germany's exports of cars and parts to China fell by 21 percent. In its message This is according to the German economic institute IW. The figures show that Europe's largest car manufacturing centre is coming under increasing pressure. More broadly, IW says cars are increasingly becoming an Asian product.

According to IW, several Chinese brands have entered the German market this year. In total, there are eight of them in the country, but they only account for 1.5 percent of total car sales in the country.

Non-Chinese carmakers' vehicles that are produced in China are also contributing to the growth in imports. For example, German carmaker BMW imports its all-electric iX3 car from China.

The study comes shortly after the European Commission (EC) announced that it is launching an investigation into whether to impose punitive tariffs on imports of Chinese electric vehicles due to suspicions that they benefit from state subsidies.

Germany's total exports to China fell by more than eight per cent in the first half of the year. Cars and car parts accounted for three-quarters of this decline.

"The business model that used to support production in Germany - the intercontinental export of high-quality vehicles - is coming under increasing pressure," said study authors Jürgen Matthes and Thomas Puls. "German manufacturers have been shifting more and more production to China for several years now, and now also increasingly in the formerly durable premium class."

Nearly 60 percent of all cars were produced in Asia last year, up from 31 percent in 2000, according to the IW study. Europe is losing importance for the industry. Only Germany and Spain are among the world's top 10 car manufacturers, while in 2000 Italy, France and Britain were also in the group.

German carmakers owe their relative resilience to their entry into the Chinese market in the 1980s, IW said.

The study also pointed out that total imports into Germany from China fell by 17 per cent in the half-year. These could be the first signs of Germany's decreasing dependence on China.

(CTK/JaV)