The Chinese group SAIC is currently working on setting up a factory in Europe to produce its electric cars, including the MG4. The electric compact could therefore still be eligible for the ecological bonus in the future, which should do a lot of harm to Tesla and its Model 3, while the latter could be deprived of this financial aid, with a price that would rise again.
Article updated on July 11, 2023 : MG France has just confirmed “ the intention to set up a production plant in Europe from SAIC Motor via a press release. The Chinese brand confirms that the MG4 is selling like hot cakes in France, with 7,701 units sold in the first half.
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Original article from July 6, 2023 : In recent months, Chinese brands have been particularly determined to invest in the European market. And it has already started well, which worries specialists, who fear this large-scale invasion. A well-founded fear, while the Middle Kingdom is now the world’s leading exporter, ahead of Japan and Germany.
A new factory
But Asian manufacturers are not content to just sell their cars here, as MG, Nio, Xpeng and BYD are already doing. Indeed, they also want to manufacture their vehicles on site. There are several reasons for this phenomenon. First, the logistics. Because to deliver cars from China to Europe, you need boats. However, this is expensive and time-consuming, which significantly lengthens lead times for end customers.
You have to add between one to two months of additional transport time for a car made in China. Especially since these are already long due to the shortage of semiconductors.
The second reason is political. Indeed, Brussels wants to put in place several measures to promote European industry. A project that follows the initiative of Joe Biden in the United States, who launched the Inflation Reduction Act (IRA), making eligible for a tax credit of $7,500 all electric cars made there.
Suffice to say that manufacturers have every interest in complying with the rules, so as not to be penalized. This is precisely what the Chinese group SAIC Motor plans to do, which is currently working on the establishment of a factory on European soil. This information comes to us from the British agency Reuterswhich relays the statements of the company.
The group, which owns several brands including Maxus, Roewe and MG is currently looking for a place where to lay the first stone of its production site. At this time, no statement has yet been made on the countries or regions being considered, but we should know a little more in the coming months.
A real advantage
The Chinese firm follows in the footsteps of CATL, which already has two factories on the Old Continent, dedicated to the manufacture of batteries. With this new site, SAIC Motor hopes to increase its market share, while its sales outside its native country are on the rise. In fact, no less than 530,000 cars were exported out of China in the first half, an increase of 40% compared to 2022.
And unsurprisingly, 70% of these sales come from the MG brand. In Europe alone, the firm has sold no less than 115,000 vehicles since the start of the year. A success that we owe in particular to the MG 4, which was a hit to the point of finding itself in the top 3 of the best-selling cars in Europe for the whole of May with 6,310 copies.
If it still remains far behind the Tesla Model Y, which totaled 21,530 sales over the same period, it is already ahead of the Model 3. And it should not go any better for the American sedan, which lets itself be ahead despite its sharp drop in price earlier in the year. Because if MG is going to manufacture its cars in Europe, it is also so that its cars can continue to be eligible for the ecological bonus. For the record, the French government wants to reserve it for vehicles assembled on the Old Continent.
Gold, the Model 3 is produced in the United States and China, but not yet with us, since the Berlin Gigafactory only assembles the Model Y. The sedan could therefore see its price skyrocket, while the MG 4 would remain more advantageous. Especially since logistics costs would be reduced, which would logically be reflected in the price paid by customers in concessions. The Chinese manufacturer already offers its compact for only 99 euros per month for rental.