Import tariffs on cars from China should be lowered, not raised, to push European car makers to produce better products, believes Mercedes-Benz.
CEO Ola Källenius said an open market for Chinese cars should be the end goal – a view that contrasts plans by EU lawmakers to increase fees (and thereby forcing price rises) for heavily Chinese government-subsidised EVs.
“Don’t raise tariffs. I’m a contrarian,” he told the Financial Times. “I think go the other way around: take the tariffs that we have and reduce them.”
The probe by EU lawmakers was launched last year after car bosses including Stellantis CEO Carlos Tavares complained that Chinese firms’ cheaper cars would wipe out their European counterparts.
Examples of this can be seen in the UK market, where the MG 4 EV has experienced great success with its high specification level yet low £26,000 starting price.
“That is the market economy. Let competition play out,” said Källenius, adding that the Chinese push into Europe was a “natural progression of competition and needs to be met with better product, better technology, more agility” from European firms.
About the probe, he said: “We didn't ask for this. We as companies aren't asking for protection, and I believe the best Chinese companies aren't asking for protection. They want to compete in the world like everybody else.”
He added: “It has been opening up markets that has led to wealth growth, especially in the economic wonder of China that has lifted hundreds of millions of people out of poverty. If we believe protectionism is the thing that gives us long-term success, I believe history tells us that is not the case.”
Asked how he would tackle the problem faced by European firms, some of which have said that building similar-spec cars at the same price is near-impossible, Källenius was keen to agree on a need for a “level playing field”.
“[We need to be] mindful about building economic win-win situations”, he said. “We live in a pragmatic world and realise there are some expectations to the general market economy rule. But if we seek our fortune in increased protectionism, we are going the wrong way."
Porsche has also backed its Chinese counterparts, last year vowing to fight any EU-imposed tariffs. The market is important to the German brand, with 320,221 cars sold there last year, all of them imported.
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