WUHAN, CHINA – MAY 25: (CHINA OUT) Participants wear protective masks as they look around the BMW Ix3 during the 2023 Central China International Auto Show on May 25, 2023 in Wuhan, Hubei Province, China. More than 80 brands took part in the 2023 Central China International Auto Show, which began on Thursday. According to local reports, more than 40 brands of electric vehicles participated in the exhibition. (Photo from Getty Images)
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German automaker BMW Group said diversifying its supply chains away from China does not mean it is leaving the country entirely.
“We always try to diversify our risks. That doesn’t mean leaving a country or a particular region,” CEO Oliver Zipse told CNBC’s Martin Soong in an exclusive interview.
“The BMW Vision Neue Klasse in particular will not be a small piece. So we need big suppliers – we need more than one anyway,” Zipse said during the Japan Mobility Show 2023. BMW unveiled its new Vision Neue class electric concept car in September to take on Tesla.
BMW will not leave China, he said, adding that free trade is “fundamental to our business model.”
In July, Germany urged companies to reduce risk from China, warning that Beijing’s economic strategy aims to reduce dependence on other countries while increasing the dependence of international production chains on China.
“For Germany, China remains a partner, a competitor, a systemic rival. But the aspect of systemic rivalry has become increasingly prominent in recent years,” said German Foreign Minister Annalena Baerbock had said at that time.
“This has implications for European and global security,” said a 64-page report from the German Foreign Ministry.
Earlier this month, the European Union launched an investigation into subsidies for Chinese-made electric vehicles exported to Europe after a surge in EU imports of such vehicles from China.
European Commission President Ursula von der Leyen said on September 13 that the “global market is being flooded with cheaper electric vehicles at “artificially low” prices due to “huge government subsidies.”
“This could lead to the Commission imposing countervailing duties on EU imports of battery electric vehicles from China to offset government subsidies, where justified, and to create a level playing field,” it said in a statement published on October 4 the European Commission.
BMW makes cars, including electric vehicles, in China and exports them to Europe. According to the Center for Strategic & International Studies, thanks to the increasing competitiveness of Chinese electric vehicles, production cost advantages and large production capacity, China has become a global production and export center for electric vehicles such as BMW and Tesla.
In 2022, the German automaker opened its $2.2 billion factory in Shenyang with a strong focus on electric vehicle production.
BMW produces the iX3 EV in China and exports it to Europe and will export the electric Mini Cooper from next year, making it vulnerable to possible EU tariffs on imports from China.
In response to the EU investigation, Zipse said BMW was a “global player”.
“We are at home in Europe. We are at home in China. We are at home in the USA. We are of course even more at home here in Japan. That’s why we’re here. And we always promote and speak for it.” “Free trade worldwide,” said Zipse.
“This basic principle of a functioning economy and only free trade can really reduce our impact on the climate – with free trade, with technologies from all over the world, with free access to raw materials and, above all, their implementation in all technologies,” said Zipse.
According to a Reuters report, BMW Chief Financial Officer Walter Mertl said he did not support punitive tariffs, arguing that the EU investigation would cause more harm to automakers doing business in China and protect those that do not generate significant sales in China .
Source : www.cnbc.com