Automotive News Europe — 2024-05-29
Automotive Industry
Potential punitive taxes on car imports into the EU from China are among reasons for the closure.
Chinese automaker Great Wall Motor said it will close its European headquarters in Munich, Germany, citing tough market conditions for EVs and the threat of European tariffs on Chinese imports.
The closure will take effect on 31 August 2024 and will mean the loss of 100 jobs, a Great Wall spokesperson told Automotive News Europe.
The automaker will continue to sell cars in its European markets including Germany and the UK, but will oversee its operations in the region from China, the spokesperson said.
"This is more of an organizational and optimization change in light of tough market conditions," the spokesperson said.
Europe's EV market slowdown, particularly in Germany, as well as heavy discounting among rivals were cited by Great Wall as examples of the tough market conditions.
The spokesperson also cited the "very concrete threat of punitive taxes" on car imports from China after the European Union launched an investigation opened an investigation into China's electric-vehicle subsidies.
"That creates a very high uncertainty for a company like ours with an EV portfolio," the spokesperson said.
Increased tariffs could accelerate Great Wall's early stage plans to establish a factory in Europe, the spokesperson added. Germany, Hungary or the Czech Republic could be locations for a factory, the automaker said in 2023.
Great Wall is also looking into importing combustion engine cars, which are not expected to be affected by the tariff rises, the spokesperson said.
Great Wall’s European organization has a "toxic" working environment, current and former employees told the business newspaper Frankfurter Allgemeine Zeitung in January 2024. Newly recruited employees complained about an unusually harsh tone in the company, a lack of respect for their expertise and "permanent domination" from China, the paper said.
Great Wall's head of European business, Steffen Cost, a former Kia manager, told the paper that the automaker's working environment is intense and "not everyone can cope with it."
Great Wall opened its Munich headquarters in 2021 with roles including r&d, sales and management. The automaker originally planned to reach 300 staff members by 2022.
One goal was to liaise with Great Wall subsidiary battery company Svolt Energy Technology.
Svolt this week said it had cancelled plans to open a battery plant in Brandenburg, Germany citing the "current highly volatile automotive market" as well as the delay of a "significant" customer project. Svolt said a second plant in Überherrn in Germany is still planned, but has been delayed by planning regulations.
Great Wall sold 1,621 vehicles in Europe in the first four months, up 147% from the year before (2023), according to figures from market researchers Dataforce. Its bestseller was the Ora 03, with 1,149 units sold. The Ora 03 was renamed from the Funky Cat after the company changed its badging strategy in November 2023. The second bestseller was the Way 05 with sales of 297.
The automaker is the process of launching the Ora 07 electric midsize sedan, formerly the Lightning Cat, which will go ahead as planned in Germany and the UK, the spokesman said.
Great Wall's other European markets include Sweden, Ireland, the Baltic countries and Bulgaria. European markets will now be handled by local distributors, directed by Great Wall in China.