Why Mercedes wants the European Union to leave the Chinese brands alone

Mercedes does not want competition from China to be slowed down

If your nephew opened a lemonade stand on his street, he probably wouldn't mind if you parked your car in front of the boy next door's stand. You could also imagine that the European car brands would not mind at all if the EU were to slow down the Chinese brands a bit, perhaps with an extra import tax. Strangely enough, Mercedes does not want that at all.

According to Mercedes CEO Ola Kallenius, healthy competition is only good: 'Open markets are the driving force behind wealth creation. Let's keep the markets open and the participants fighting it out.' He says this to Bloomberg Television. The interview is being held after the announcement that the EU will investigate unfair competition from Chinese car brands.

Disadvantageous for European car brands

If the EU starts to tax cars from China more heavily, the country could introduce its own levies in response. Bloomberg reports that China is the most important market for Mercedes, BMW and Volkswagen. The car brands sell a third of all cars there and of course the brands do not want China to introduce its own tax.

German brands also source enough parts from China. If these parts become more expensive to purchase, production costs will rise again. Mercedes therefore foresees a lot of consequences if the EU decides to intervene. "It would be a complete illusion to think that we can divide the automotive world into separate regions that have nothing to do with each other," says Kallenius.

The Dutch AutoWeek sharply notes that Smart is half owned by Mercedes, but also half owned by the Chinese Geely. Sanctions could therefore be directly detrimental to Mercedes' sub-brand.

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