China’s BYD to build cars in Europe

BYD will become the first Chinese car maker to manufacture passenger cars from start to finish in Europe – but it may lead to higher prices, despite no import tariff and lower shipping costs.

Chinese electric-car specialist BYD has announced plans to build a factory in Hungary amid growing sales globally – and a European Union probe into the sharp prices of Chinese-built electric cars on the continent.

The factory in Szeged – 20km north of Hungary’s border with Serbia, and 25km north-west of the Romanian border – will be “built in phases” and is expected to “create thousands of local jobs,” according to BYD.

It is believed to be the first brand-new, passenger-car factory opened in mainland Europe by a Chinese car maker that is capable of producing cars from start to finish.

However, BYD – which exclusively produces plug-in hybrid and electric vehicles – will not be the first Chinese marque to roll its passenger vehicles down a production line in Europe.

MG revived the Longbridge, UK factory – in operation when the company was under British ownership – for MG 6 sedans and TF sports cars from 2008 to 2016, while Great Wall Motors (GWM) at one point operated a facility in Bulgaria.

Unlike the BYD factory, the MG and GWM facilities merely completed partially assembled vehicles shipped from China – known as ‘complete knock-down kits’ (CKD) – rather than built them in Europe from start to finish.

MG has expressed an intention to build a new factory in Europe to produce its cars – from start to finish – but it has not announced a location.

MORE, FROM 2008: Longbridge resumes car production

The interest from Chinese car brands in building vehicles in Europe comes amid fears of tariffs placed on Chinese-made electric cars by the European Union, as sales grow rapidly and they threaten established European car brands.

The EU has launched a probe into the low prices of Chinese electric cars in Europe, which it alleges are “kept artificially low by huge state subsidies”.

While executives admit European-built vehicles would cost more to manufacture than Chinese-made versions, they would avoid a 10 per cent import tariff – and could be better adapted to European tastes, according to MG.

The new BYD passenger-vehicle factory is located 260km south-east of an existing BYD electric bus factory in northern Hungary, less than two kilometres from the Slovakian border.

The Audi TT and Q3, Mercedes-Benz CLA and EQB, and Suzuki S-Cross and Vitara sold in Australia are built in Hungary, and BMW is constructing a factory in the Eastern European nation to manufacture its next-generation ‘Neue Klasse’ electric cars due in 2025.

BYD has not announced when the new Hungarian factory will open, when construction will begin, and which vehicles it will manufacture.

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