Automakers focus on the global market, chide the US over tariffs at Shanghai's auto show

Time of India

25-04-2025

Booths of big Chinese, German and Japanese automakers were bustling at Shanghai's auto show this week as the industry kept its focus on a wider global market not subject to steep U.S. tariffs on imports of cars and auto parts.
Signs are that U.S. President Donald Trump's 25% tariffs on auto imports is causing companies to recalibrate their strategies, and in some cases find new opportunities.
"When governments up above are at odds, it's going to impact the businesses down below," Ma Lihua, general manager at Soling, a Chinese maker of domain control units and other electronics used in such things as rearview camera displays.
Soling, headquartered in Shanghai, counts Ford Motor Co., Toyota Motor Corp. and many other top tier global and Chinese automakers among its customers. It's also setting up a manufacturing base in Vietnam, whose local EV maker VinFast has ambitions to become Southeast Asia's leading automaker.
Many of the dozens of auto parts and components companies exhibiting at the Shanghai auto show have operations spanning both the Chinese and world markets.
Metal components maker Gestamp, a supplier of chassis, battery boxes and other key auto parts, has suffered from a slowdown in the U.S. and western European markets but is expanding in Asia, Latin America and Eastern Europe.
The tariffs are now an added complication, as automakers watch to see what comes.
"In the past, supply chains usually would run like Swiss clockwork, but now it's the opposite," said Ernesto Barcelo, chief ESG officer for metal components maker Gestamp, said of the uncertainty now dominating the market.
"The lack of stability now, it's something very ... fluffy," Barcelo said.
A fundamental criteria for investing in any market is political stability, Wei Jianjun, chairman of Great Wall Motor Co., told reporters when asked about his company's plans to expand manufacturing overseas. That applies to countries like Hungary, where the company has not yet decided on whether to build a factory, he said, but also to the United States under Trump.
"If a country is not politically stable, it's very risky," said Wei, who also goes by the name Jack Wey.
With U.S. tariffs so high, Great Wall can focus elsewhere, such as on trade between China and Europe, which is bound to grow, he said. He didn't address the issue of the tariffs of up 45.3% that the EU has imposed on electric vehicles made in China.
Tianshu Xin, CEO of Leapmotor International, a joint venture of Stellantis and China's Leapmotor, said the U.S. market wasn't its first focus.
Now, "we want to monitor the regulatory environment, and also customer preferences are slightly different compared with other markets," Xin said.
Japan's Nissan plans to launch 10 new EVs in China by 2027, nine of them its own brand, and to spend an extra $1.4 billion by the end of 2026 on its expansion there. In the U.S. it has the option to ramp up its spare capacity to make up for reduced imports due to the tariffs.
"Some doors have been shut, but others have been opened," Ma said. "But any plan you make you will change it very quickly. The market changes very quickly."
Apart from higher tariffs, automakers and suppliers also must contend with national security restrictions that are an increasingly important factor in auto electronics.
Wuhan Kotei Informatics, which provides software for autonomous driving, adapted its business model to cope with sanctions. Now the company based in central China's Wuhan acts as a consultant and allows foreign customers to adapt software to local requirements, said Ye Xiongfei, general manager for the company's autonomous driving division.
"It's like I teach you how to walk if you don't know how to walk, and I will help you walk if you aren't able to walk," Ye said.
Some restrictions on technology are understandable, but too many "will hurt the innovation of the U.S. itself, hindering the speed of the development of their supply chains if it tries to only use local companies," he said.
Some attending the show said they believe that ultimately Trump will end up softening his stance.
"Trump is a businessman and he hopes to boost the U.S. economy by imposing tariffs on other countries, but I do believe those measures are temporary," said Yang Jingdi, assistant to the CEO of LvXiang Automobile Parts Co., which makes electronics including rearview mirrors and pumps.
"We'll wait and see," he said. "China has full and abundant supply chains and it is the U.S. that won't hold on if the tariff measures from both sides remain unchanged."
AOD Technology, which makes domain control units that process various commands such as opening doors and controlling running boards on SUVs, was displaying a bare-bones version of Tesla's Cybertruck equipped with its devices - evidence of its ambition to eventually sell to the EV maker.
It might not be the best time to be planning on selling such components to a U.S. automaker for production in America, Claire Deng, a senior sales manager, conceded.
But she said AOD, based in south China's Zhongshan, had bought the Cybertruck as part of a process that can take years, developing what's needed to become a supplier.
"Who knows what will happen," she said. "We want to be ready."