Changan, Xpeng, Chery and GAC are accelerating European production and supplier plans as the EU prepares rules aimed at strengthening its industrial base.
Chinese carmakers are moving quickly to entrench themselves in Europe before Brussels finalises new local-content rules designed to deepen the bloc’s industrial base. The European Commission’s proposed “Made in Europe” framework, which forms part of the planned Industrial Accelerator Act, is intended to push more manufacturing and sourcing into Europe and to make it harder for foreign producers to rely on imported components while serving the EU market.
The timing matters. Chinese brands have been gaining ground in Europe and are now looking beyond imports and towards local production as China’s own auto market weakens under intense price competition. At the Paris motor show, Changan Automobile said it was committed to building production capacity in Europe and to working more closely with local suppliers. The company said it wants its first European-built vehicle on the road by mid-2027, with annual output in Europe rising to 180,000 cars by 2028 and 350,000 by 2030. Xpeng, Chery and GAC are pursuing similar strategies, reflecting a broader shift from exporting finished cars to embedding operations inside the region.
That acceleration has raised questions about how much effect the EU’s eventual rules will have. Industry figures quoted by Reuters said Chinese manufacturers appear to be moving faster than policymakers, particularly after the bloc imposed tariffs on Chinese-made electric vehicles in October 2024. Some of those companies have since shifted towards tariff-free plug-in hybrids, while others have stepped up plans for European factories, local engineering and supplier partnerships. Xpeng said it aims to begin production in Europe at roughly the same time as the new rules take effect.
The debate in Europe is not only about foreign competition, but also about the definition of “Europe” itself. The current proposal would exclude countries outside the EU such as Turkey, Britain and Morocco, even though their automotive industries are deeply integrated with those of the bloc. That exclusion has drawn criticism from manufacturers and trade groups that say the supply chain is already regional rather than purely EU-based. Turkey’s Automotive Industry Exporters’ Association says its sector supports 250,000 EU jobs, and it points to vehicles such as Ford’s electric Transit vans, more than half of whose parts by value are sourced from EU suppliers.
Volkswagen chief executive Oliver Blume has backed the concept, arguing in Paris that a strong Europe depends on a strong industrial base. Chery chairman Yin Tongyue was more circumspect when asked about the EU’s separate agreement with China to cut hybrid vehicle imports, telling Reuters that his company would first study the details. He said Chery’s priority was to design locally, with local engineering, local production and a local supply chain. Automotive analyst Felipe Munoz said Chinese groups had already shown they could move “very fast”, adding that the policy could make life harder for them, but would not stop them.
Disclaimer: This content is intended for informational purposes only. Readers are advised to exercise their own judgement, conduct due diligence, or consult a qualified expert before acting on any information provided.
