SAIC demands new EU tariff hearing

CHINESE automaking conglomerate SAIC is demanding an urgent hearing in front of the European Commission relating to the impost of a (maximum) 37.6 per cent tariff on its EVs entering the trade bloc.

State-owned SAIC, which comprises brands including MG, LDV, Maxus, Roewe, SAIC Volkswagen and SAIC GM among a raft of other subsidiaries and joint ventures, is seeking the hearing saying in a statement, “The European Commission overlooked some of the information and counter-arguments submitted by SAIC during the investigation”.

Automotive News Europe (ANE) said in a report that SAIC’s request comes a day after the European Commission published findings from its nine-month investigation into China’s EV market, giving insight into the evidence it collected to support Brussels’ largest trade case yet.

“The provisional duties of between 17.4 percent and 37.6 per cent are designed to prevent what the Commission’s president Ursula von der Leyen has described as a threatened flood of cheap EVs built with state subsidies,” said ANE.

The European Commission noted a reluctance from the Chinese government and SAIC to cooperate with the investigation thereby justifying slapping SAIC with the highest tariff rate of 37.6 per cent.

Other Chinese automakers BYD and Geely that presumably toed the Commission’s line face lower tariffs of 17.4 per cent and 19.9 per cent respectively.

No doubt further antagonising Chinese auto-makers is the fact that the new tariffs are in addition to an existing standard 10 per cent duty on car imports to the EU.

The provisional EU tariffs on Made-in-China EVs allows a window of appeal to potentially assuage retaliation from Beijing and to afford interested parties (including European manufacturers involved in Chinese JVs) the opportunity to fine tune tariff details with submissions accepted until July 18.

Intensive talks are said to be taking place on wide ranging issues relating to the new tariff and all interested parties can request a hearing under terms announced in the EU official journal.

In the background, car brands are re-evaluating their pricing strategies based on the provisional rates, says ANE.

“What has been creating the most anxiety for China EV Inc has been the uncertainty of how their products will be received in these international markets,” said Sino Auto Insights founder Tu Le.

“But with the US and EU settled on tariffs and rates, it seems like they can now adjust their global strategies to include this new normal.”

A France-based MG spokesperson told news media that the automaker had enough MG 4 vehicles in stock “to last until November without increasing prices”, which possibly speaks to potential changes for SAIC’s tariff rate in the EU… post the Commission’s latest hearing.

Exacerbating the issue is the number of joint ventures between European and Chinese car makers that has put many of them in a conundrum as the new tariffs may hit their bottom line.

A lack of solidarity has emerged among European auto makers some of whom vehemently support the tariff and others that lean the other way, the latter no doubt helping SAIC’s cause.