PARIS, Oct 13 — As Europe debates new local-content rules to boost local manufacturing, Chinese automakers are already building factories and supply chains across the continent, getting ahead of the measures before they are even finalised.
The European Union's (EU) proposed "Made in Europe" rules, part of a planned Industrial Accelerator Act, are designed to strengthen the bloc's industrial base by encouraging more manufacturing and sourcing within Europe.
The measures would also push foreign manufacturers seeking access to the EU market to produce more goods locally and rely on European suppliers.
The plan comes as Chinese automakers have rapidly gained market share in Europe, with more entrants on the way.
But "Made in Europe" has sparked a political dispute within Europe over which countries the rules should cover.
Meanwhile, many Chinese automakers appear unwilling to wait for the outcome. Pressing ahead with localisation plans, they are expanding manufacturing and supplier networks in Europe before the details of any new requirements are settled.
Battered by an electric vehicle (EV) price war and slowing sales in China, the world's largest auto market, Chinese automakers increasingly see Europe as a key growth opportunity.
"We are committed to building our local production capacity and exploring opportunities here," Changan Automobile's Zhao Fei told the media at the Paris car show.
He added that he had already visited Europe twice for "in-depth discussions" with suppliers and was also talking to European automakers about producing vehicles together.
Changan plans to make 180,000 cars a year in Europe by 2028 and 350,000 by 2030, as Zhao said he hopes the company can build its first vehicle in Europe in early 2027, well before any EU local-content requirements are expected to take effect.
Other Chinese automakers, including Xpeng, Chery, and GAC, are also pursuing European production plans built around local supply bases.
"We are looking to start production at the same time" as 'Made in Europe' rules take effect, Xpeng vice president Yeqing Zheng said of plans to add production capacity in Europe. Magna already builds EVs for Xpeng in Austria.
Some industry experts argue Chinese automakers are moving faster than EU policymakers, raising questions about how much impact the final rules will have.
United States (US) auto industry lobby group Alliance for Automotive Innovation's chief executive officer (CEO) John Bozzella said Europe is viewed as a "cautionary tale" in the US for acting too late in response to Chinese competition.
The US Senate is working to pass a bill that would permanently ban Chinese cars, which he said reflects concerns over data security.
"The policy responses seem to be happening in response to market realities in Europe. But in the US all sides are saying, 'let us try and address these issues up front'," Bozzella said.
'We grew together'
In a speech at the Paris motor show, Volkswagen CEO Oliver Blume backed 'Made in Europe', saying "a strong Europe depends on a strong industry".
But in its current form, the proposal excludes non-EU countries such as Turkiye, the United Kingdom, and Morocco, where vehicle production and supplier networks are deeply integrated with Europe's automotive industry.
Automakers with operations in those countries, along with local industry groups, argue that limiting the definition of Europe to the EU would damage supply chains that have developed across the wider region.
Turkiye's Automotive Industry Exporters' Association (OIB) says the country's automotive industry supports 250,000 EU jobs.
More than 50 per cent of the parts by value in Ford's Turkish-made electric Transit vans come from EU suppliers, including batteries from Hungary and Poland and components from Germany, Italy, and elsewhere.
"We grew together. Turkiye is an integral part of Europe's auto industry," said OIB chairman Kemal Yazici.
Alongside drafting local content rules, the EU has also brokered a deal with China to cut hybrid vehicle imports into the bloc by more than half.
When asked about the deal, Chery chairman Yin Tongyue told Reuters that the company will first study the details.
But he is more interested in discussing Chery's plans for Europe.
"We want to design locally. We want to have local engineering, local production, and a local supply chain," Yin said.
Automotive analyst Felipe Munoz said Chinese automakers are unlikely to be deterred by the policy debate as they have demonstrated an ability to "do anything, very fast".
When the EU imposed tariffs on Chinese-made EVs in October 2024, many shifted their focus to tariff-free plug-in hybrids.
'Made in Europe' is "making life a bit more difficult for the Chinese. But it will not stop them," he said.
