Why are Chinese cars closing the European market?
The Chinese manufacturers will focus on the price to enter the European market, but they will not have to sacrifice either, thanks to the space left by the European manufacturers, who taught the customer with a minimum threshold of around ten thousand euros for a car.
It was recently announced that Chinese cars would enter Europe. Five years ago, while European manufacturers were rubbing their hands over the growth in the Chinese market that was absorbing millions of cars, someone pointed out the imbalance: in the world car trade, China accounted for 6% of imports and only 0.6% as exports. It was the result of the Europeans' competitive advantage in engines and gearboxes. In a few years history has changed.
First, the electrical breakthrough weakened European manufacturers, spending hundreds of billions in investment. The focus was on environmentalism, without it being clear who was driving it. Europeans needed more money available than they had sales because of these innovations. Then came Covid and the war...
On the other hand, it is certain that European industry has given up on protecting itself and its workers.
In Italy, the queen of small cars is the Panda, whose average net market value increased by 28% in the three-year period 2020/22.
The industry already exists to create wealth, but also as we understood, for social, environmentalist purposes. Who knows if employment is part of ESG policies? Probably not, since more workers in this sector means more welfare, more consumption and, ultimately, more CO2. No, it's greener to employ Chinese and Africans.