China’s BYD to build cars in Europe

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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.

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.

Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020.

Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family.

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