The Japan Times - German carmakers weigh China, defence tie-ups for idle plants

EUR -
AED 4.248105
AFN 75.770596
ALL 92.762559
AMD 422.720519
ANG 2.0703
AOA 1061.880869
ARS 1706.354669
AUD 1.637736
AWG 2.083564
AZN 1.971037
BAM 1.955432
BBD 2.326962
BDT 141.823334
BGN 1.962242
BHD 0.435718
BIF 3453.950583
BMD 1.156733
BND 1.477822
BOB 13.465468
BRL 6.040925
BSD 1.155383
BTN 110.192281
BWP 15.565073
BYN 3.514139
BYR 22671.957183
BZD 2.323663
CAD 1.60514
CDF 2629.253412
CHF 0.941015
CLF 0.026895
CLP 1056.7913
CNY 7.800083
CNH 7.801606
COP 3603.822404
CRC 519.802266
CUC 1.156733
CUP 30.653411
CVE 110.244272
CZK 24.210763
DJF 205.741316
DKK 7.473191
DOP 67.627285
DZD 152.299364
EGP 57.668157
ERN 17.350988
ETB 186.897659
FJD 2.584377
FKP 0.853399
GBP 0.855002
GEL 3.019524
GGP 0.853399
GHS 12.651621
GIP 0.853399
GMD 85.024294
GNF 10149.091752
GTQ 8.815343
GYD 241.67456
HKD 9.077054
HNL 30.972177
HRK 7.534035
HTG 151.121586
HUF 363.017812
IDR 20622.34285
ILS 3.418265
IMP 0.853399
INR 110.410701
IQD 1513.515426
IRR 1590030.052589
ISK 142.166837
JEP 0.853399
JMD 182.965599
JOD 0.820169
JPY 184.272161
KES 149.331922
KGS 101.156702
KHR 4675.120976
KMF 493.925187
KPW 1041.059598
KRW 1638.639283
KWD 0.357061
KYD 0.962819
KZT 536.1092
LAK 26076.097131
LBP 103462.246866
LKR 384.457714
LRD 209.700572
LSL 18.691186
LTL 3.415531
LVL 0.699696
LYD 7.356617
MAD 10.715985
MDL 20.034233
MGA 4974.064769
MKD 61.518433
MMK 2428.743274
MNT 4161.410395
MOP 9.338444
MRU 46.399276
MUR 54.486429
MVR 17.871955
MWK 2003.423313
MXN 19.69164
MYR 4.726298
MZN 73.927211
NAD 18.691186
NGN 1572.659254
NIO 42.522005
NOK 10.922567
NPR 176.30785
NZD 1.963226
OMR 0.444768
PAB 1.155383
PEN 3.896867
PGK 5.190024
PHP 71.098608
PKR 320.900664
PLN 4.306226
PYG 6934.696128
QAR 4.211808
RON 5.236186
RSD 117.317942
RUB 97.377191
RWF 1698.980555
SAR 4.340955
SBD 9.310058
SCR 15.912008
SDG 694.622124
SEK 11.020235
SGD 1.480159
SHP 0.856984
SLE 28.344188
SLL 24256.10146
SOS 660.275854
SRD 43.926343
STD 23942.02751
STN 24.495394
SVC 10.109099
SYP 15039.835978
SZL 18.688486
THB 38.337629
TJS 10.669694
TMT 4.060131
TND 3.387463
TOP 2.785134
TRY 55.369898
TTD 7.827528
TWD 37.04043
TZS 3061.72433
UAH 51.684982
UGX 4292.192975
USD 1.156733
UYU 46.291296
UZS 13754.413873
VES 890.810236
VND 30246.82002
VUV 137.249116
WST 3.163007
XAF 655.833689
XAG 0.017879
XAU 0.000264
XCD 3.126128
XCG 2.082208
XDR 0.81787
XOF 655.833689
XPF 119.331742
YER 274.381102
ZAR 18.703474
ZMK 10411.984809
ZMW 21.835894
ZWL 372.467396
  • CMSC

    -0.0250

    21.45

    -0.12%

  • CMSD

    -0.0100

    21.58

    -0.05%

  • BCE

    0.1500

    23.47

    +0.64%

  • NGG

    -0.1500

    81.05

    -0.19%

  • RIO

    -0.4100

    95.68

    -0.43%

  • RYCEF

    0.1300

    20.84

    +0.62%

  • GSK

    -0.4785

    49.52

    -0.97%

  • RELX

    -0.2400

    34.43

    -0.7%

  • RBGPF

    0.0000

    71.34

    0%

  • BTI

    -0.2900

    57.06

    -0.51%

  • VOD

    0.2000

    16.42

    +1.22%

  • BP

    0.2196

    42.53

    +0.52%

  • JRI

    0.0635

    12.61

    +0.5%

  • BCC

    -0.8900

    83.24

    -1.07%

  • AZN

    -0.7900

    156.45

    -0.5%

German carmakers weigh China, defence tie-ups for idle plants
German carmakers weigh China, defence tie-ups for idle plants / Photo: Ina FASSBENDER - AFP

German carmakers weigh China, defence tie-ups for idle plants

Germany's beleaguered carmakers are desperately seeking solutions for their under-used factories, with speculation swirling that Chinese manufacturers or weapons makers could move in.

Text size:

Across Europe, carmakers are in trouble due to growing Chinese competition, weak demand and a choppy transition to electric vehicles (EVs), leaving many plants operating way below capacity.

One solution is to open up factories for Chinese manufacturers to produce cars in Europe as they seek to get around EU tariffs on EVs, a step recently taken by Stellantis which owns Jeep and Fiat.

Chinese brands, including BYD, MG and Chery, are gaining ground in Europe fast and now make up around nine percent of the region's overall sales, according to consulting firm Dataforce.

Germany's Volkswagen -- Europe's biggest automaker -- said in April it is also open to the idea of "partnering" with Chinese manufacturers at its plants.

VW, in the process of slashing thousands of jobs as profits and sales suffer, is seeking to reduce global production capacities by around one million vehicles -- half in China and half elsewhere, particularly Europe.

Officials in regions hosting Volkswagen plants have welcomed the idea of bringing VW's joint venture partners from China onto the production lines of German factories.

- 'Securing the future' -

Dirk Panter -- economy minister of the state of Saxony, whose VW plant in Zwickau faces an uncertain future -- notes that other Chinese manufacturers are starting to produce cars around Europe, including through such tie-ups.

"To secure the future of the automotive industry in Saxony and in Germany, it is essential not to ignore this reality," he told AFP.

The Handelsblatt financial daily has reported that VW -- a 10-brand manufacturer, whose models range from Audi to Seat and Skoda -- already held talks in 2024 with Chinese carmakers but they ended with no result.

VW has more recently sought to dampen talk of imminent deals, with a spokesman telling AFP that "there are currently no plans or discussions regarding the production of Chinese vehicles in the German plants of the Volkswagen Group".

While some analysts believe there could be a reluctance to give Chinese carmakers easier access to Europe, others think it is the Chinese firms themselves that are hesitant due to high costs in Germany.

"I think that the hesitation on the part of the Chinese manufacturers is very great," Frank Schwope, an auto industry consultant and lecturer at the FHM Berlin university, told AFP.

"The offer would have to be very attractive."

Stellantis's announcements so far have mainly focused on Spain and France, where costs are lower.

- Switch to armoured vehicles? -

German manufacturers are also said to be considering opening up or even selling plants to defence companies, which are expanding rapidly as Germany and other European countries rearm.

Der Spiegel recently reported that French-German tank and weapons maker KNDS is in talks to take over a Mercedes-Benz plant at Ludwigsfelde south of Berlin that produces vans and convert it to make armoured personnel carriers.

A KNDS spokesman would not confirm the report, telling AFP only that it was "seeking suitable partner companies for the planned ramp-up in the defence sector".

Mercedes told AFP that "our goal is to develop a future-ready solution for Ludwigsfelde".

Volkswagen has confirmed it is in talks with defence companies about taking over one of its smaller plants in the city of Osnabrueck, where production is due to end as part of its cost-cutting drive.

Reports say the group has held talks with Israel's Rafael Advanced Defence Systems about making components there for the Iron Dome air defence system, including heavy-duty trucks and electricity generators but not the projectiles themselves.

Discussions have also reportedly taken place with KNDS about the factory.

Still, entering the defence sector could prove controversial for Volkswagen.

The group was founded when the Nazis were in power, produced military equipment for Germany during World War II and used forced labour.

"In historical terms, it's not an easy issue for Volkswagen to share locations with defence companies," Stefan Bratzel, an auto industry expert at the Center of Automotive Management in Germany, told AFP.

S.Ogawa--JT