{"id":95221,"date":"2026-07-15T17:30:09","date_gmt":"2026-07-15T17:30:09","guid":{"rendered":"https:\/\/www.europesays.com\/europe\/95221\/"},"modified":"2026-07-15T17:30:09","modified_gmt":"2026-07-15T17:30:09","slug":"european-inaction-is-driving-chinas-car-industry-dominance","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/europe\/95221\/","title":{"rendered":"European inaction is driving China\u2019s car industry dominance"},"content":{"rendered":"

Beijing is tightening its grip on the global car industry. This June, for the first time, China exported<\/a> more than one million cars in a single month. Shipments rose by 71% from a year earlier, putting the country on course to export more than 10 million vehicles in 2026. This is more than another Chinese manufacturing record: it is further evidence that Europe, and Germany in particular, misunderstood how China would transform the global car industry.<\/p>\n

Any conversation about Chinese competition is also a conversation about the capacity of European political elites to anticipate the future global economy. For years, European leaders worried about their dependence on China as an export market. Volkswagen, Mercedes-Benz and BMW came to rely heavily on Chinese consumers, while European governments assumed this relationship would endure.<\/p>\n

In Berlin, the main worry has always been access to China\u2019s market, rather than Chinese competition. However, Germany failed to consider the opposite possibility: that Chinese manufacturers would first displace European brands inside China and then outcompete them in Europe and the rest of the world. That is what is happening now.<\/p>\n

China has built a manufacturing ecosystem covering almost every part of the car manufacturing supply chain. This has allowed Beijing\u2019s companies to move faster<\/a> in the production of electric vehicles, and then offer increasingly sophisticated cars at prices European manufacturers struggle to match. This increasing dominance is demonstrated by the fact that, during the first four months of this year, Chinese car brands accounted<\/a> for around 6% of EU vehicle registrations, almost twice their share a year earlier.<\/p>\n

The response from European leaders is coming late and may be insufficient. The EU has added<\/a> additional duties on Chinese-made electric vehicles and is considering similar measures for plug-in hybrids as Beijing\u2019s manufacturers adapt their exports to bypass existing restrictions. After China\u2019s new record, we are likely to see increased calls for stricter<\/a> measures and more trade conflict. Tariffs might be a necessary tool, but they cannot compensate for the absence of an industrial strategy.<\/p>\n

In this sense, it is important to remember that the problems of the European car manufacturing sector do not start in China. The industry faces expensive energy, weak domestic growth and slower product development. Raising the price of Chinese products solves none of these problems; at best, it gives European manufacturers some more time.<\/p>\n

Another problem is that, in trade, European governments have differing beliefs on which approach should be taken. For example, France has pushed<\/a> for stronger protectionism, while Germany remains divided<\/a> between defending domestic production and preserving access to the Chinese market for its largest companies. Spain has sought<\/a> Chinese investment, while Prime Minister Pedro S\u00e1nchez has encouraged \u201cavoiding another trade war\u201d.<\/p>\n

Brussels, meanwhile, is taking a tougher<\/a> stance. European Council President Ant\u00f3nio Costa last month called<\/a> the EU\u2019s roughly \u20ac1 billion daily trade deficit with China \u201csimply unsustainable\u201d, while Industry Commissioner St\u00e9phane S\u00e9journ\u00e9 has asked<\/a> for trade tools to be used \u201cmore systematically\u201d.<\/p>\n

Europe has not decided between a range of options. This includes whether it wants to preserve European-owned carmakers, its market share in China, industrial jobs, cheap vehicles or the fastest possible green transition. All of these approaches cannot happen at once, and many won\u2019t ever happen. Protectionist barriers may be necessary, but the way they are being formulated feels more like a way to kick the can down the road without confronting the political cost of shaking up Europe\u2019s inefficient economies. It may already be too late to save Europe\u2019s car industry in its present form, but decisions need to be made now.<\/p>\n","protected":false},"excerpt":{"rendered":"Beijing is tightening its grip on the global car industry. This June, for the first time, China exported…\n","protected":false},"author":2,"featured_media":95222,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[227,81,31787,4,15,92,6956],"class_list":["post-95221","post","type-post","status-publish","format-standard","has-post-thumbnail","category-europe","tag-car-industry","tag-china","tag-chinese-evs","tag-europe","tag-european","tag-germany","tag-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/95221","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/comments?post=95221"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/posts\/95221\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media\/95222"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/media?parent=95221"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/categories?post=95221"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/europe\/wp-json\/wp\/v2\/tags?post=95221"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}