Volkswagen Considers Selling and Building Chinese Cars in Europe

Key Takeaways

• Volkswagen is considering selling and building Chinese-developed models in Europe.
• The plan aims to avoid tariffs and boost utilization rates at German factories.
• The first model to be imported could be a new SUV, with a feasibility study already commissioned.
• Employee representatives are open to evaluating additional China-developed models.
• VW’s CFO, Arno Antlitz, has warned against the idea, citing concerns about branding and quality.

What’s Behind Volkswagen’s Plan to Sell Chinese Cars in Europe?

Volkswagen is exploring the possibility of selling and building Chinese-developed models in Europe, a move that could help the company avoid tariffs and boost utilization rates at its German factories.

The plan, which is still in its exploratory stages, involves importing complete vehicles from China or assembling them in Europe using major components sourced from China.

According to reports, the first model to be imported could be a new SUV, which is expected to be close in size to the Touareg and will ride on Volkswagen’s China Scalable Platform (CSP).

How Will Volkswagen Avoid Tariffs?

Any vehicles imported from China will be subject to tariffs, which is a major concern for Volkswagen.

However, building these vehicles in Europe could be an obvious way to avoid tariffs, with the company’s plant in Zwickau being considered as a possible location.

Current EU countervailing duties on Chinese-built EVs vary by manufacturer, with SAIC facing 35%, BYD 17%, and Tesla just under 8%, in addition to the EU’s standard import tariff.

What Are the Benefits of Building Chinese Models in Europe?

Building Chinese models in Europe could help Volkswagen boost the utilization rates at its German factories, which have been underutilized in recent years.

Employee representatives are reportedly open to evaluating additional China-developed models, provided they supplement rather than replace existing commitments to German factories.

Not Everyone Is Sold on the Idea

However, not everyone within Volkswagen is convinced that selling and building Chinese models in Europe is a good idea.

VW’s CFO, Arno Antlitz, has warned against the idea, citing concerns about branding and quality.

Antlitz has stated that building vehicles from completely unrelated competitors in China and then branding them with the Volkswagen quality image could be detrimental to the company’s reputation.

Frequently Asked Questions

Q: What is Volkswagen’s plan to sell Chinese cars in Europe?

Volkswagen is exploring the possibility of selling and building Chinese-developed models in Europe, with the goal of avoiding tariffs and boosting utilization rates at its German factories.

Q: Which model is expected to be the first to be imported?

The first model to be imported could be a new SUV, which is expected to be close in size to the Touareg and will ride on Volkswagen’s China Scalable Platform (CSP).

Q: Why is Volkswagen’s CFO opposed to the idea?

VW’s CFO, Arno Antlitz, has warned against the idea, citing concerns about branding and quality, and stating that building vehicles from completely unrelated competitors in China and then branding them with the Volkswagen quality image could be detrimental to the company’s reputation.