GWM Chairman Jack Wey talks about the brand's expansion around the world and how North American taxes are what keep Detroit's industry standing
The Chinese automotive industry is moving at a fast pace around the world. After all, the country has more than 100 brands and an installed capacity to produce no less than 55 million cars per year. Today, the domestic market absorbs almost 35 million units, but another 20 million are still missing.
For this, the rule in China is to export cars to the maximum. The problem is that the Chinese uprising puts the rest of the industry around the globe in check. And as in a War board, each market defends itself as it can. Customs barriers are weapons used to stop the advance of the Mandarin “column”.
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And in this scenario, the United States is the most reactive market against the Chinese. The massive taxation imposed on Chinese cars discourages the attempt of brands from the Asian country to venture there. And GWM Chairman Jack Wey is emphatic: “Without the barriers, the three main U.S. automakers would not be able to withstand competition from Chinese manufacturers.”
The statement came at a press conference with the Brazilian press, at the brand’s booth, set up at the Beijing Motor Show, in an analysis of the markets in which Chinese brands seek space.
In addition to the US, the Canadian market has also adopted measures to prevent the entry of Chinese cars, as well as Europe. “In North America there is a tariff barrier and stronger political rejection. In Mexico, not so much.”
Europe has taxes ranging from 23 to 30%, but in the United States, only pickup trucks pay 25% (due to the Chicken Tax). With the tariff war, the tax rose to 50%, which makes it impractical there.
Today, the US surrounds itself with various artifices to prevent the entry of Chinese cars, such as taxation and also bureaucratic requirements. The lethargy in the process practically nullifies the interest in exploring Uncle Sam’s market.
To homologate an engine in the USA, it takes an average of three years. That alone makes it impossible for a Chinese brand to get in there,” Wey points out.
On the other hand, the industry is looking for other friendlier markets to expand its gigantic industrial capacity, and Brazil is a key country, especially for GWM. But the Chinese have long since discovered that importing cars is not what will guarantee their permanence here.
Brazil also has its defense weapons. And as there is no national brand in fact (all are foreign), the Brazilian way was able to create a scenario for local production. Tax incentives, tax benefits in exchange for the installation of a factory, which moves the economy, generates jobs and expands the supply chain.
Brazil is a leading country in the region, with a large industrial base and market knowledge. And we need a deeper production location (supply of parts made in the country) to be competitive in the region”, he analyzes.
GWM already has a plant in Iracemápolis (SP) and is preparing to start the construction of a second plant in Aracruz (ES). Although the officialization has not yet been approved, the Espírito Santo government has already anticipated to seek political clout with the novelty in an election year.
In addition to GWM, BYD already has a plant in Camaçari (BA), GAC has partnered with HPE Motors to produce in Catalão (GO), Leapmotor will assemble cars at the Stellantis unit in Goiana (PE), as well as Geely bought a slice of the plant in São José dos Pinhais (PR) to produce its models. And finally, Omoda & Jaecoo should take over the Jaguar Land Rover factory, in Itatiaia (RJ), which is practically left to its own devices.
