GAC Group’s Strategy Amid EU Tariffs on Chinese-Made EVs

GAC Group's Ambitious European Expansion

GAC Group, the state-owned carmaker from Guangzhou, is set to invest in establishing factories across the European market, despite facing hefty tariffs imposed on Chinese-made electric vehicles (EVs). Wei Haigang, general manager of GAC International, emphasized that this expansion is essential for the company’s growth strategy.

Addressing Tariffs and Market Demand

During a press conference in Hong Kong, Haigang explained that while ongoing negotiations over EU tariffs could pose challenges, GAC is reviewing its plans for local production based on anticipated demand. “A final decision will be made if there is substantial demand,” he stated.

Beijing’s Stance and Market Realities

• Reports indicate that Beijing is advising companies to exercise caution when investing in Europe amidst tariff negotiations.
• However, GAC is unwavering in its intent to access the European market despite facing tariffs that could reach as high as 35.3%.
• Other analysts warn that establishing factories requires significant investment and risks if EVs do not meet market expectations.

Strategic Advantages

Chinese companies, particularly GAC, benefit from lower production costs compared to their global counterparts by leveraging a well-established supply chain. Analysts suggest that despite EU duties, production advantages may still allow some Chinese brands to successfully enter and compete in the European market.