Why manufacturing in China is a Must for Big-3

July 2, 2022
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While disruptions due to China’s zero-covid policies may have other manufacturers to look elsewhere. But the Chinese EV Ecosystem and availability of minerals, batteries has compelled BIG Three luxury car makers Audi, Mercedes & BMW to open fresh manufacturing facilities as part of their EV expansion plans.

A hard to ignore supply chain with proximity to materials and EV components has turned the tide with Mercedes Benz recently started production of its all-electric EQE model at its factory in Beijing.

This is followed by BMW opening a new manufacturing facility for its EVs at Shenyang province and Audi going for a greenfield plant in the northeastern city of Changchun.

What's well known is Mercedes-Benz, for instance, plans to be all-electric by 2030, Audi will shut production of ICE (internal combustion engine) cars by 2026 and BMW has targeted 50% of all its sales to be EVs by the end of this decade.

A recent survey by the European Chamber of Commerce showed that nearly one in four European firms are considering shifting out of China.

Tata Motors owned JLR counts China as its largest market, with £4.24bn of sales out of a global total of £18.25bn coming from the region.

It produces the Land Rover Evoque, Discovery Sport and Jaguar E-Pace models at a site in Changshu, near Shanghai, which it co-owns with state-owned car maker Chery.

But the company is struggling to capitalise on that demand as the industry battles a shortage of computer chips and components which are ubiquitous in modern cars, which is also pushing up costs.

Meanwhile, China has sustained numerous long-scale Covid lockdowns and other disruptions pushed JLR to a pretax loss of £412m for the year through March, compared to a £662m profit the year before.

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