What if, in the car, protectionism stopped being a dirty word?

A little chronological reminder. On June 13, the Oslo electric car show opened its doors. A boon for all European manufacturers, in the country where the EV is king, and at a time when all brands are starting their transition to Watts. But where were the Renaults, Stellantis or Volkswagens? At home, or misrepresented by your local dealers. But who owned these huge stands that dazzled them? In Wey, Ora or Vinfast, Chinese brands, or Vietnamese at last, came into force.

A small leap into the future. On Monday, October 17, it is the turn of the Paris Motor Show to open its doors. Where will Citroën, Opel, Fiat and others be? At their house. On the other hand, the Chinese Byd, Ora and (maybe) the Vietnamese will be there.

We’ve known for a few years now that European brands are running away from fairs. In addition, the one in Geneva, which would take place next year, throws in the towel and will recover in the Qatari sun. And still. The last World Cup to date, that of 2018, gathered more than 1 million spectators. Of course, it is elusive to embark on predictions about this year’s edition, but whatever the future audience, the hundreds of thousands of people drawn to the Porte de Versailles will not help but wonder about Asian ubiquity and European reluctance.

The Han sedan, by Chinese Byd, should also be shown at the World Cup.

Shall we explain to them that, in the name of free trade and WTO agreements, the business world is all about love and goodwill? Except the United States is, like Europe, a member of the World Trade Organization. An adhesion that in no way stopped Joe Biden from enacting his Inflation Reduction Act. In mid-August, the US president obtained a $7,500 tax credit from Congress for the purchase of an electric car. All is good for inflation, rampant in the US, and all is good for the weather. It’s just that this credit is only offered to buyers of a US or US-made car, which is good for the US economy and makes Ford, Tesla and General Motors happy, while pushing others to manufacture their EVs locally.

Europe? the playground of Chinese manufacturers

A measure entirely beneficial, therefore, for America, when at the same time, in France, the ecological bonus for the purchase of an electric car is still 6,000 euros, regardless of the origin of the brand and its place of manufacture. A more or less similar policy in the other countries of the Union. Tesla is delighted, MG is delighted, as are Byd, Vinfast and all those who will soon be launching their cars in our markets.

A perfectly viable situation if our European manufacturers were competitive and if their prices could compete with Chinese models. However, prices for cars designed and manufactured in the old continent are rising like never before. In the name of the scarcity of microprocessors, the price of batteries, the age of the captain and the sacrosanct “Sell less and earn more” very popular these days.

The MG - ZS EV SUV: the first Chinese box in Europe.
The MG – ZS EV SUV: the first Chinese box in Europe.

Chinese manufacturers also perfectly understood the message. Is the European market supposed to be the toughest in the world for car manufacturers? From General Motors to Infiniti, have many brands already broken their teeth there and retired? The marks of the middle empire are engulfed there. Its sales in the old continent double every year. Nothing could be more logical: they don’t know scarcity. From batteries to microprocessors, they make or buy first. The fees ? they sacrifice time to gain market share.

This doubled Chinese sales curve could become exponential if European manufacturers give up their place at the big fairs, if they continue to practice price inflation and if Europe does not consider any protectionist measures. Psychologists know this: There are three ways to approach an impending catastrophe: realism, anxiety, or denial. Obviously, the authorities, like the builders, checked the third box.

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