By Victoria Waldersee
FRANKFURT (Reuters) – Nearly 900 Chinese auto parts makers and a handful of electric vehicle makers are showcasing their wares at a trade show in Frankfurt, as the country’s auto sector defies looming trade barriers to expand its global presence and counter eroding domestic profitability.
Chinese automakers including BYD, Geely, Hongqi and GAC International were expected to display their vehicles at the show, called Automechanika, in addition to the event that normally focuses on suppliers.
The country’s auto sector is investing heavily in overseas expansion, even as Europe and North America erect trade barriers to stem the influx of Chinese-made electric vehicles that they say benefit from unfair subsidies.
The exhibition, dubbed “EV Expo,” which opens Tuesday, was created in partnership with the China Council for the Promotion of International Trade, an added feature to the normally supplier-focused event.
“We want electric vehicles from Chinese car manufacturers, which are currently to some extent unknown, to gain the trust of the industry,” Olaf Musshoff, head of Automechanika, said at a press conference.
According to an analysis by Moody’s, the share of China’s auto sector in the country’s total outward investment has increased from 16% in 2018 to 22% by 2023, and car exports have hit record highs this year.
The strong presence of Chinese suppliers – almost double the number of German suppliers present – highlights their growing role in the global supply chain, with Chinese automakers increasingly planning local production in Europe and elsewhere to circumvent trade tariffs restricting imports.
A PwC study published this month warns that the shrinking availability of equity capital is making it harder for German suppliers to invest in innovative technologies, due to the focus on profitability.
Chinese companies, often backed by the state, are more likely to invest in improving batteries and software, the study found, gaining market share from German and Japanese companies.
However, the size and scope of Automechanika Frankfurt – with 4,200 companies from more than 170 countries – demonstrated that Europe was still at the heart of promoting innovation in the sector, said Frank Schlehuber of European suppliers’ association CLEPA.
“Frankfurt remains the centre of gravity,” he said.
(Reporting by Victoria Waldersee, editing by Alison Williams)
