German automakers expect Chancellor Friedrich Merz to push for market liberalisation in his upcoming trip to China. “The German side must detail exactly where China creates competitive distortions” said Hildegard Müller, president of the VDA, in “Welt am Sonntag”. “The goal of the talks should be to open the markets further for both sides-no back‑and‑forth isolation. China also owes itself this responsibility”.
German manufacturers have recently seen a sharp drop in Chinese sales. Contributing factors include heavily subsidised local electric‑vehicle brands and a new luxury tax on expensive cars that mainly hits German marques. Müller added that the industry is also looking for constructive proposals from China to reduce distortions.
She cautioned, however, against provoking counter‑actions by introducing new EU measures such as preferential treatment for European cars in public procurement, purchase incentives or tariffs. The French auto sector, which has a much weaker presence in China than German producers, is already demanding similar rules, and European moves could invite retaliatory measures from China. “Even if China is now forced to make offers, Europe must carefully weigh its actions and responses, since any decision could trigger countermeasures from the local industry” Müller warned.
Europe must never close its automotive market. “It should remain open to Chinese companies and bring investment and value‑creation back into Europe. Europe also needs to propose steps to stabilise trade relationships” she said.
Accordingly, the EU should avoid measures that might entice Beijing into retaliation. “The EU tariffs on Chinese electric cars were and remain a mistake” Müller said. The tightening of China’s luxury tax in late 2024 is also seen by the industry as a reaction to EU policy changes that year.