China’s Great Wall Motor said it had formally submitted responses to the European Commission’s anti-subsidy probe of Chinese-made electric vehicles (EVs) while calling for a fair and open trade environment. The company is the first EV maker to respond to the EU inquiry, launched on Sept 13 by German Commissioner Ursula von der Leyen.
The investigation is a critical milestone in the EU’s efforts to set up tariff barriers against a flood of cheaper Chinese EV imports benefiting from state subsidies. If the investigation concludes that these EV imports harm the European industry, the EU can impose tariffs on Chinese-made EVs and parts to level the playing field.
Great Wall, which ranked eighth in sales for pure electric and plug-in hybrid cars in China in the first nine months of this year, plans to strengthen its presence abroad. The company has a European distribution network and is considering establishing its first European plant, possibly in Germany, Hungary, or the Czech Republic.
Founded in 1984, Great Wall Motor is a Chinese privately owned automaker headquartered in Baoding, Hebei province. It produces vehicles under the Haval, Tank, Wey, and Ora brands and Wingle pick-up trucks.
The company is expanding its global footprint and has a sales office in Belgium and a distribution center in the Netherlands. In addition, it has a dealer network in Romania, Bulgaria, North Macedonia, Serbia and Turkey. Great Wall also has a presence in Western European markets such as Italy and the United Kingdom through CKD exports, though this has been chiefly used for warranty work.
Europe is a key strategic market for GWM, with the company having started site selection efforts to find locations in the region and envisioning full capabilities from production to sales there. It aims to bring the Ora Good Cat EV to the continent, initially in France, Germany, Norway, Italy, and Spain (where it will be sold as the Volkswagen Beetle look-alike Funky Cat).
While the EU anti-subsidy probe does not appear to jeopardize Great Walls’s growth prospects, the company faces several hurdles to overcome. Expanding rapidly at a time of high financial uncertainty could heighten protectionism sentiments in the West, and its casual copying of Western models risks raising suspicions that it is simply dumping products on an oversupplied world market. The success of Great Wall and other Chinese carmakers in the world market will ultimately hinge on whether they can move beyond being a maker of low-cost knockoffs to becoming a truly global player. This is a race that the likes of Nissan and Toyota have already won, but China’s car industry still has a long way to go to achieve similar status.