Checking out an electric vehicle made by China’s BYD at the Munich auto show, German designer Tayo Osobu was impressed by the interior and said she would consider buying one.”And why not?,” said the 59-year-old from Frankfurt, in a country where domestic titans Volkswagen, BMW and Mercedes-Benz have long dominated.”If they are sold here, it means they meet European standards.”At the IAA auto fair in the German city this week, Chinese electric vehicle (EV) makers were out in force, highlighting the determination of the country’s fast-growing car giants to make inroads into Europe.Some 100 Chinese auto companies flocked to Munich, out of a total 700 exhibitors at the biennial show, ranging from big-name manufacturers to smaller suppliers and start-ups.While they still lag far behind Europe’s long-established carmakers in terms of market share on the continent, firms from the world’s number two economy have been gaining ground with their technology-packed EVs.Leading the pack is giant BYD, whose sales in Europe surged by 250 percent in the first half of the year. In Munich, the manufacturer was showcasing flagship models like the Dolphin Surf, a small EV with a starting price of around 20,000 euros ($23,400) — cheaper than many offerings from European carmakers.Volkswagen, Europe’s biggest automaker, in contrast has seen sales and profits fall in the face of fierce competition and weak demand, prompting it to announce plans for mass layoffs in Germany. And American EV pioneer Tesla, which was not present at the show in Munich, has also seen its market share drop — in part because many consumers have been put off by its boss Elon Musk’s support for far-right political parties.- EU tariffs – Chinese carmakers have grown rapidly as they have benefited from lower labour costs, generous government support and strong consumer demand for their high-tech models in the world’s biggest auto market, according to experts. “What has changed in five years is that, at a lower price, the Chinese are now on par in terms of technology and quality in many respects,” said Stefan Bratzel, director of the Center of Automotive Management in Germany. To combat the influx of Chinese cars and protect European manufacturers, the EU last year slapped hefty new tariffs on Chinese-made EVs over what the bloc said were unfair state subsidies.But sales of Chinese electric cars have continued to grow, and BYD looks set to skirt the levies — its first European factory, in Hungary, will start production later this year.Bratzel however said it was “too early” to talk about an invasion. Chinese carmakers still need to establish “a relationship of trust” with European consumers and build up networks of dealerships and after-sales services, he said.There was scepticism about Chinese cars among some of those attending the Munich fair.”If you drive a Chinese car, which garage would you go to if there are problems?” said Pamina Lohrmann, a 22-year-old German woman, at the Volkswagen stand where an old model of the popular Polo was on display.”I grew up with German brands, they appeal to me more.” – European ‘heritage, legacy’ -Despite such concerns, some Chinese carmakers, such as Xpeng, are hoping to attract a tech-savvy, younger demographic.President Brian Gu said the manufacturer was aiming for “the first wave of tech enthusiasts”.Europe’s storied carmakers are fighting back, hoping their trustworthy reputations, built over many decades, will stand them in good stead.Among a series of more affordable EVs unveiled by Volkswagen in Munich this week was one named “ID.Polo”, aiming to capitalise on the popularity of its classic small car.European carmakers are also adopting new battery technology and looking at using more Chinese components in their vehicles, according to industry expert Matthias Schmidt.They aim to focus on their “heritage, legacy and DNA,” said Schmidt, adding that these are characteristics that “Chinese new market entrants simply don’t have”. 

Mexico, under pressure not to serve as a back door for Chinese goods entering the United States, has proposed a 50 percent duty on car imports from the Asian giant — up from 15-20 percent.The initiative, contained in a bill submitted by the government to Congress, seeks to assuage US President Donald Trump — who has repeatedly urged trading partners to increase duties on China — while also bolstering Mexico’s industrial sector.The White House has said Chinese producers are abusing a free-trade deal between the United States, Mexico and Canada to send goods northward over the Mexican border tariff-free.Beijing criticised the proposed tariffs on Thursday, with a foreign ministry spokesman saying, without mentioning the United States, that China “firmly opposes any coercion.”Mexican President Claudia Sheinbaum has also complained of the impact of Chinese imports on domestic manufacturing, and the bill says the increased tariff will seek to protect 19 industrial sectors considered “strategic.”It also proposes raising tariffs on other countries with which Mexico has no trade agreement.Mexico replaced China in 2023 as the United States’ largest trading partner, with the Latin American country’s northern neighbor buying more than 80 percent of its exports.It sends nearly three million automobiles to the United States a year, including cars and trucks assembled by US auto companies in Mexico.China said it opposed any restriction that “undermines China’s legitimate rights and interests.””China attaches great importance to the development of China-Mexico relations, and hopes that Mexico will move forward in the same direction with China,” Lin told a regular news briefing in Beijing on Thursday.- Improve trade balance -Light vehicle imports from China would be subject to a 50 percent tariff, and auto parts between 10 and 50 percent, if the bill is approved.The bill, announced by the economy ministry Wednesday, said the changes sought to “protect the national industry in strategic sectors, replace imports from Asia with domestic production” and “improve Mexico’s trade balance.”The initiative should protect 325,000 jobs in strategic industries and create thousands more, the ministry said.Two out of every 10 light vehicles sold in Mexico are Chinese, according to official data. Sales in the sector grew by 10 percent last year.Several auto giants, including America’s General Motors and Ford, Germany’s Volkswagen and Japan’s Nissan, Honda, and Toyota, have factories in Mexico.According to the wording of the bill, South Korea, India, Indonesia, Russia, Thailand and Turkey would also be affected by the tariff increases.Trump has imposed a 25 percent tariff on car imports, with exemptions for vehicles with US content assembled in Mexico. Sheinbaum’s ruling party holds a majority in Congress, and the bill is likely to pass.

Asian and European equities mostly rose Thursday as investors built on this week’s rally after US data ramped up expectations for a string of interest rate cuts.Markets have enjoyed a healthy run in recent months — with some hitting record highs — on growth optimism that the Federal Reserve will resume its monetary easing process as figures indicate the world’s top economy is slowing.Those bets ramped up Friday on a report showing jobs creation was well below forecasts, while another this week revealed there were more than 900,000 fewer new posts than thought in the 12 months through March.On Wednesday, the Department of Labor said the producer price index (PPI) fell on-month in August for the first time since April, confounding forecasts for a rise. July’s figure was also revised down.The data soothed worries that US President Donald Trump’s tariff war would reignite inflation — as many have warned — and gave the Fed room to cut rates and address weakness in the jobs market.Focus is now on the more crucial consumer price index report due Thursday, which could play a major role in how many cuts the Fed makes, and how big they are.The PPI reading was “a red carpet unfurled straight to the September Federal Open Market Committee, with (boss Jerome) Powell cast as the reluctant guest of honour”, wrote SPI Asset Management’s Stephen Innes.”What markets heard wasn’t just a tick lower in input prices; it was confirmation that the worst inflation ghost stories aren’t materialising. Producers aren’t shoving tariffs straight onto consumers; they’re eating some of it to stay competitive.”He added that if the consumer price figure “comes in tame, the conversation tilts from a careful quarter-point shuffle to the possibility of a half-point swing”.Vincenzo Vedda, global chief investment officer at DWS, predicted five rate cuts by September 2026.Wednesday’s figures helped push the S&P 500 to another record high on Wall Street, and most of Asia followed suit.Tokyo piled on more than one percent to a second successive record, helped by a 10 percent surge in tech investment titan SoftBank to its own record. The firm’s gains came after its subsidiary Arm announced a new AI platform. Seoul also hit another fresh peak, while Shanghai, Singapore, Taipei, Mumbai and Bangkok also rose.Jakarta jumped after Indonesia’s government said it plans to inject around $12 billion into the economy. The gains briefly pushed it back above Monday’s close, having tumbled Tuesday after President Prabowo Subianto removed finance minister Sri Mulyani Indrawati following anti-government protests.London and Paris rose while Frankfurt was flat but there were losses in Hong Kong, Sydney, Wellington and Manila.- Key figures at around 0715 GMT -Tokyo – Nikkei 225: UP 1.2 percent at 44,372.50 (close)Hong Kong – Hang Seng Index: DOWN 0.4 percent at 26,086.32 (close)Shanghai – Composite: UP 1.7 percent at 3,875.31 (close)London – FTSE 100: UP 0.5 percent at 9,270.32 Euro/dollar: DOWN at $1.1693 from $1.1696 on WednesdayPound/dollar: DOWN at $1.3517 from $1.3528 Dollar/yen: UP at 147.78 from 147.40 yen Euro/pound: UP at 86.50 pence from 86.46 penceWest Texas Intermediate: DOWN 0.2 percent at $63.52 per barrelBrent North Sea Crude: DOWN 0.2 percent at $67.36 per barrelNew York – Dow: DOWN 0.5 percent at 45,490.92 (close)