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

SHANGHAI: Booths of major Chinese, German, and Japanese automakers were bustling at Shanghai’s auto show this week as the industry maintained its focus on a broader global market not subject to steep US tariffs on imports of cars and auto parts.

Signs indicate that US President Donald Trump’s 25% tariffs on auto imports are prompting companies to recalibrate their strategies and, in some cases, discover new opportunities.

“When governments up above are at odds, it’s going to impact the businesses down below,” said Ma Lihua, general manager at Soling, a Chinese manufacturer of domain control units and other electronics used in 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 is also establishing a manufacturing base in Vietnam, where local EV maker VinFast aspires to become Southeast Asia’s leading automaker.

Many of the dozens of auto parts and components companies exhibiting at the Shanghai auto show operate across both Chinese and global markets.

Metal components maker Gestamp, a supplier of chassis, battery boxes, and other key auto parts, has experienced a slowdown in the US and Western European markets but is expanding in Asia, Latin America, and Eastern Europe.

The tariffs are now an added complication, as automakers monitor developments.

“In the past, supply chains usually would run like Swiss clockwork, but now it’s the opposite,” said Ernesto Barcelo, chief ESG officer for Gestamp, describing the uncertainty dominating the market.

“The lack of stability now, it’s something very ... fluffy,” Barcelo added.

A fundamental criterion 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 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 US tariffs so high, Great Wall can focus elsewhere, such as trade between China and Europe, which is bound to grow, he said. He did not address the issue of the tariffs of up to 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 US market was not its primary focus.

“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 under its own brand, and to invest an additional $1.4 billion by the end of 2026 in its expansion there. In the US, it has the option to ramp up its spare capacity to compensate 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 must also contend with national security restrictions, which are becoming an increasingly significant factor in auto electronics.

Wuhan Kotei Informatics, which provides software for autonomous driving, has adapted its business model to cope with sanctions. The company, based in central China’s Wuhan, now acts as a consultant and allows foreign customers to adapt software to local requirements, said Ye Xiongfei, general manager of 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 US itself, hindering the speed of the development of their supply chains if it tries to only use local companies,” he said.

Some attendees at the show expressed optimism that Trump would eventually soften his stance.

“Trump is a businessman and he hopes to boost the US 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 manufactures electronics including rearview mirrors and pumps.

“We’ll wait and see,” he said. “China has full and abundant supply chains and it is the US that won’t hold on if the tariff measures from both sides remain unchanged.”

AOD Technology, which manufactures 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 plan on selling such components to a US automaker for production in America, Claire Deng, a senior sales manager, conceded.

However, Deng said AOD, based in south China’s Zhongshan, had purchased the Cybertruck as part of a process that can take years, developing what is needed to become a supplier.

“Who knows what will happen,” she said. “We want to be ready.”

By RSS/AP

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