Overseas Markets Paying Bills While Building Industrial Barriers

On September 22, German auto unions erupted in massive protests again.

This is also the largest automotive industry protest in Germany in recent years, with 175,000 auto industry workers gathering and parading in over 280 cities nationwide, with employees from leading companies such as Volkswagen, Mercedes-Benz, BMW, and Bosch speaking out collectively.

The spark for this nationwide protest was VW's profit warning released on September 18, expecting this year's operating profit margin to be at most 1%. Volkswagen plans to lay off 100,000 employees by 2030. However, some professionals also blame the root causes of domestic industry layoffs, declining sales, and transformation dilemmas entirely on the "unfair competition" of Chinese cars.

IG Metall President Christiane Benner has stated on multiple occasions, "The immense pressure faced by German industry mainly comes from US tariffs, rising energy prices, and the most critical factor - unfair competition from China." She hopes Germany will adopt an "Made in EU" development concept to resist unfair competition, and calls on the EU to increase tariffs on Chinese imported cars to protect EU local manufacturers.

Dream of European Automotive Hegemony Shattered

The German public holds the opposite view from Union President Benner, making these remarks ironic.

According to German media statistics, 60% of German consumers are willing to buy Chinese new energy vehicles, 80% of intended EV buyers prefer Chinese brands, and many German consumers even purchase Chinese-made high-end models cross-border. Cost-performance ratio and intelligent experiences have long been recognized by the terminal market.

A few days ago, German parallel importer Auto China brought in Audi E7X and E5 Sportback models designed exclusively for the Chinese market for sale in Germany, but faced legal proceedings initiated by Audi headquarters.

Audi E7X sold over 4,000 units in its first month on the market, achieving good results in the Chinese market. After parallel export to Germany, the price nearly doubled, but the intelligence and three-electric performance beat German domestic products at the same price point.

German dealers are not fools — they are willing to risk being sued by headquarters to bring Audi E5 Sportback and E7X into Germany precisely because this car has extremely strong appeal to the local market.

The public votes with their feet to acknowledge Chinese car quality, but capital and industry unions take the lead in building high trade walls.

Getting to the essence, the anxiety of the German automotive industry has never been "Chinese cars are bad", but that Chinese cars are too good, too cheap, and iterate too fast, completely shattering the brand premium and technical barriers accumulated by Europe over a century.

In the past, Europe relied on technical monopolies in engines, gearboxes, and chassis to firmly occupy the top of the global automotive industry and earn excess profits; whereas Chinese new energy vehicles, with differentiated advantages in pure electric architecture, intelligent cockpits, and high-level intelligent driving, bypassed fuel vehicle technical barriers, achieved dimensional reduction attacks, and directly impacted the foundation and lifeline of the German automotive industry.

At the end of last year, German Railway Company (DB) purchased a large number of electric buses, including about 200 from Chinese EV giant BYD. Union President Benner expressed anger at this, believing that as a German state-owned enterprise, DB should adhere to local procurement principles and should not buy products from foreign companies like BYD.

Although there is some color of protectionism and nationalism, after all, they are in the position of a union, they must seek benefits for workers.

In fact, the EU has not only imposed high tariffs on Chinese new energy vehicles but also continues to expand the investigation scope, incorporating plug-in hybrid models into the anti-subsidy review system, continuously raising the entry threshold for Chinese car companies.

More contradictory is that while the German government knows the necessity of cooperation with China, with some car companies still relying on the Chinese market for revenue survival, they also deliberately exaggerate "overcapacity" and "unfair competition" narratives, emulating the logic of the Plaza Accord that once suppressed the Japanese industry, attempting to weaken the export competitiveness of Chinese cars through exchange rate pressure and trade restrictions.

On September 9, 2026, Italian unions even directly suggested that once Chinese brands' registration volume in Europe exceeds 8%, the excess portion will be taxed at 80%, with anxiety overflowing from the words.

This divergence between market demand and policy regulation proves that Europe's blockade has nothing to do with product competitiveness, purely a passive counterattack for industrial self-protection.

The Working-Class Warning

If the blockade against Chinese car companies in Europe comes with entanglement and contradiction, American unions are more of a helplessness.

Six core industry associations representing US car manufacturers, parts suppliers, and dealerships, in a rare joint letter to the Trump administration, hoped to limit Chinese car companies from entering the US market, including any form of landing in North America such as local production, overseas transfer, etc.

This joint letter completely tore off the mask of the US "free trade", exposing its exclusionary industrial protection logic.

The alliance also listed in the letter the security risks and economic threats that Chinese electric vehicles and intelligent connected car technologies might pose to the US.

Just a few days ago, Trump vaguely indicated that if a Chinese car company could employ American workers to produce cars in the US, he was willing to allow them to build factories in the US.

This is not the first time Trump has signaled an open attitude towards Chinese car companies entering the US. Earlier this year, Trump mentioned that if Chinese car manufacturers wished to build factories in the US, he would be "very happy to see this situation".

In the fuel vehicle era, the US relied on giants like GM and Ford to control industry rules and could firmly hold the local market and even radiate globally. But in the new energy and intelligent era, US car companies lagged in transformation, with three-electric technology, intelligent driving, and vehicle cost-performance ratio falling completely behind Chinese brands.

Moreover, consumers in the US market are equally full of expectation for intelligent, high cost-performance Chinese new energy vehicles. Even the three-wheeler didn't sell out when it came to the US, and the low-speed electric vehicles hit the market were a dimensional reduction attack.

More absurdly, the US has also enacted strict rules of origin, requiring the local value content of cars exported from Southeast Asia to be no less than 70%, strictly controlling the transshipment and rebranding of Chinese parts.

Even under such protectionism, it couldn't block the enthusiasm of the American people. At the Tijuana Rio district in Mexico, cars with California plates are parked outside Chinese domestic car dealerships year-round, and cars there are basically driven into San Diego on the day they are sold.

BYD Seagull renamed Dolphin Mini in Mexico, starting price折合 $21,000. The money to buy a new car at the US average price is enough for two and a half, the change can still cover a whole year's electricity bill.

This is what is called an affordable substitute.

Some American consumers don't live in border cities at all, specifically buy plane tickets to fly to Tijuana, eat Mexican food on the side, pick up the car and drive back to Arizona or Nevada, even Oregon. Buying a car has become a destination trip, which can be counted as paying tribute to the new "Beat Generation" in this "on the road" way.

Southeast Asia's Ambition

After the European and American high-end markets were completely closed, emerging markets such as Southeast Asia and Latin America, once considered the basic plank for Chinese car exports, also began to tighten policies comprehensively.

In the past, relying on RCEP tariff dividends and geographical advantages, Southeast Asia was the core incremental market for Chinese cars going global. With the advantage of high cost-performance ratio, Chinese brands' market share in the local area rose rapidly. But now, driven by continuous US pressure and local industry protection needs, many Southeast Asian countries have successively adjusted trade policies and tightened entry rules.

Mexico led the implementation of strict tariff policies, raising the tariff on imported light vehicles from China from 20% to 50% directly impacting Chinese cars' layout in the Latin American market. Southeast Asian countries followed suit synchronously. Indonesia issued strict SNI mandatory certifications for complete vehicles and batteries, lengthening the entry review cycle and raising compliance costs.

In January this year, Chinese brands faced a historic moment in Thailand with a 47.34% market share, surpassing Japanese cars that dominated the market for over 60 years for the first time. BYD ranked second in the market with 12,800 vehicles.

But just a month later, the situation changed rapidly. In February this year, Chinese brand market share plummeted to 11.6%. BYD dropped from 12,800 to 295 units, a quarter-on-quarter decline of 97.7%. No Chinese brand entered the top five of the Thai market, and Japanese car market share rebounded to 78.9%.

Currently, ten major Thai industry associations jointly petitioned the government, calling for a significant increase in complete vehicle import consumption tax and strengthening local production barriers. Japanese car companies were behind this.

On September 10, the Thailand National Electric Vehicle Policy Committee agreed in principle to adjust the vehicle consumption tax, linking tax benefits for electric vehicles to enterprise investment, production, and local procurement contributions in Thailand. According to this direction, enterprises that only import for sale without local manufacturing will face higher taxes.

Obviously, this is a huge benefit for Japanese car companies that have already taken root in Southeast Asia.

Malaysia was more direct. In December 2025, it terminated EV import incentives, now requiring "local production rate of car companies not lower than 40%, 80% capacity used for export, local sales models set minimum output value threshold".

In the past ten years, the Chinese automotive industry has completed an epic comeback.

From joint venture monopoly of the market and core technology being subject to others, to new energy production and sales ranking first in the world for consecutive years, and self-developed three-electric and intelligent driving technologies leading the global, Chinese cars have completely rewritten the global century-old automotive industry pattern.

CAAM latest release: From January to August this year, Chinese car exports were 7.153 million units, up 66.7% year-on-year. The total export volume for 2025 was 7.098 million units. Eight months, ran through last year's total volume. According to authoritative institutions, Chinese car export volume in 2026 may reach 10 million units, up 41% year-on-year, becoming the first country globally to break through 10 million vehicle exports, about 2.5 times that of the world's second largest car exporter Japan.

Under high-speed growth, Chinese cars are facing "encirclement and blockades".

German industrial workers collective protest, US whole industry joint letter blockade, Southeast Asia and other emerging markets tariff barrier upgrade... This targeted blockade can be seen as the ultimate strategic containment of China's emerging capacity by old strong powers under the transition of new and old orders in the global automotive industry.

When the Japanese and Korean automotive industries rose in those days, they also encountered comprehensive trade blockades by Europe and the US, and finally stood firm in the global market relying on deep technology, brand breakthrough, and rule breakthrough.

The century-old automotive industry pattern is being reshaped. The true era belonging to Chinese cars has never been smooth sailing growth, but a breakthrough rebirth after experiencing wind and rain blockades.

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