Sino-EU Consultation Consensus Implemented: Seven Car Makers Issue Statements, None Mention Export Growth

[Car Market Insider] Recently, the second regular meeting of the China-Europe Trade and Investment Consultation Mechanism was held in Beijing. Both sides reached an understanding on hybrid vehicle trade in a manner consistent with World Trade Organization rules. On October 14, SAIC, Great Wall, Dongfeng, GAC, BYD, Chery, Geely Holding Group, and other car manufacturers issued statements successively to express support. The China Association of Automobile Manufacturers released a related statement on the same day.

The Core of the Consensus: Three Principles

According to the Ministry of Commerce, on October 12, the spokesperson of the Ministry of Commerce, in response to questions from reporters on the China-Europe hybrid and electric vehicle consultation consensus, stated: Both sides, based on the principles of mutual respect and equal consultation, conducted intensive consultations on hybrid and electric vehicle trade, balancing economic and trade differences and mutual concerns.

Regarding hybrid vehicles, both sides emphasized and confirmed three basic principles: respect for facts, non-discrimination, compliance.

⭐ Cui Dongshu: Export of PHEVs to Europe Expected to be Nearly 800,000 This Year, May Drop Next Year

Cui Dongshu, head of the Passenger Car Market Analysis Division of the China Association of Automobile Traders, stated that this time, China and Europe reached relevant trade arrangements for hybrid vehicles through negotiations, using consultation to replace the tough measures of directly imposing tariffs, bringing stable expectations for Chinese car manufacturers operating in the EU, and overall it is a win-win situation.

He also pointed out:

[In terms of scale, the export volume of domestic PHEV models to the EU is expected to be close to 800,000 this year. Affected by the new trade arrangements, this export volume may drop next year, putting short-term pressure on PHEV exports to Europe.]

Cui Dongshu believes that Chinese car manufacturers need to accelerate the localization capacity layout in the EU and take root in the local industrial chain.

Statements from Seven Car Manufacturers

The China Association of Automobile Manufacturers released a statement on the same day, expressing "welcome and support" for the positive results achieved in the consultations.

⭐⭐ Another News on the Same Day: BYD Builds Factory in Europe

On October 14, it was reported that BYD Executive Vice President Li Ke stated at the 2026 Paris Motor Show that BYD will make large-scale investments in manufacturing in Europe, and France has entered the list of candidates for BYD's European factory construction.

According to reports, BYD's first European passenger car factory in Hungary is planned to start large-scale production in the fourth quarter of this year. Future plans include setting up a second and third complete vehicle factory and a battery factory in Europe. ⚠️ Regarding this news, the media sought clarification from BYD, but no response was obtained as of press time.

BYD's sales in Europe: In 2025, new car registrations exceeded 187,000, a year-on-year increase of 268.6%, market share increased from 1.9% to 4.3%, entering the top 10 European electric vehicle brand sales for the first time; January to August 2026 approximately 234,100 vehicles, year-on-year increase of 144.1%.

Currently, BYD has formed four major overseas factories in Thailand, Uzbekistan, Brazil, and Hungary. Excluding Hungary, the other three have already started production.

My Viewpoint: The Consensus Solves "Not Getting Worse"

Core Judgment: Seven car manufacturers issued statements on the same day to support the China-Europe consultation consensus, with different wordings—SAIC said "highly appreciate", Dongfeng said "fully support", BYD said "highly pay attention to". But none mentioned "export growth targets", all focused on "environment" and "compliance". And the numbers given by Cui Dongshu explain the reason: This year's PHEV exports to the EU are expected to be close to 800,000, and may drop next year.

First, look at the content of the consensus. The core of this arrangement is "not specifically targeting Chinese products", rather than "giving extra preferential treatment to Chinese products"—it changed the path that might otherwise lead to additional tariffs to consultation handling. The three principles clearly stated by the Ministry of Commerce, "respect for facts, non-discrimination, compliance", are precisely this meaning.

Second, ⭐ And Cui Dongshu's judgment points out its actual meaning. The numbers he gave are: This year's domestic PHEV model exports to the EU are expected to be close to 800,000; Affected by new trade arrangements, this export volume may drop next year, short-term pressure. These two sentences should be read together: "Stable expectations" is for enterprises — rules are clear, no sudden tariff increases; while "short-term pressure" is for export volume — scale growth will be constrained. The consensus solves "not getting worse", rather than "will get better" — it changes the way car manufacturers do business: In the past, quick volume growth could be achieved through complete vehicle exports alone; now growth must be based on local capacity. This also explains the sentence he said immediately after: "Chinese car manufacturers need to accelerate the localization capacity layout in the EU".

Third, ⭐ Statements from the seven car manufacturers just corroborate this shift. SAIC "highly appreciate", Great Wall "welcome... and will actively implement", Dongfeng "fully support" and stated they will "continuously improve the overseas business compliance system construction", GAC "support", BYD "highly pay attention to", Chery "support", Geely Holding "welcome and support". Wording varies, but the common point is all emphasize "stable, predictable, fair environment". And the wording of He Yi, Executive Deputy Secretary-General of CAAM, is more direct: The Chinese automotive overseas going model is evolving from the preliminary stage dominated by complete vehicle exports to a full value chain overseas including technology brands, supply chains, and even standards, enterprise overseas strategy layout pays more attention to local deep diving. None of the seven statements mentioned export targets, all focused on "environment" and "compliance" — the choice of wording itself explains their judgment on the next step.

Fourth, ⭐ And the one that truly answers "what to do next" is another news on the same day. On October 14, it was reported that BYD Executive Vice President Li Ke stated at the Paris Motor Show that BYD will make large-scale investments in manufacturing in Europe, France has entered its list of factory construction candidates; Hungary's first passenger car factory is planned to start large-scale production in the fourth quarter of this year, and future plans include layout of a second, third complete vehicle factory and a battery factory. ⚠️ Regarding this news, the media sought clarification from BYD but no response was obtained as of press time — it is still in the "it was reported" state. However, BYD's European sales can explain why it needs capacity: 2025 European new car registrations exceeded 187,000, year-on-year growth of 268.6%, market share rose from 1.9% to 4.3%, entering the top 10 European electric vehicle brand sales for the first time; This year January to August approximately 234,100 vehicles, year-on-year growth of 144.1%. At this growth rate, relying solely on complete vehicle exports will continue to be constrained by trade arrangements; building a factory locally not only avoids this problem but also responds faster to local demand.

Fifth, and this is not a matter for just one company. News since this year shows XPeng is negotiating to acquire a European factory, Geely acquired the Body 3 assembly line of Ford's Spain factory, SAIC will build its first electric vehicle factory in Europe in Galicia, Spain. The clearer the trade arrangement, the more prominent the necessity of building a factory locally — and the cost is that a complete vehicle factory usually takes years from site selection to production, and needs supporting supply chain and after-sales system.

Two Test Points: ① Whether next year's PHEV export volume to Europe will drop as predicted — this is a direct verification of the actual effect of the consensus; ② Whether BYD's second European factory can be launched and where it will be located — currently France is only one of the candidates, and the news has not been officially confirmed.

Summary

On October 14, SAIC, Great Wall, Dongfeng, GAC, BYD, Chery, Geely Holding Group, and other car manufacturers issued statements successively, expressing support for the understanding reached between China and the EU on hybrid vehicle trade. The China Association of Automobile Manufacturers released a related statement on the same day. Cui Dongshu, head of the Passenger Car Market Analysis Division of the China Association of Automobile Traders, stated that this time using consultation to replace direct tariff imposition brought stable expectations for Chinese car manufacturers operating in the EU, overall it is a win-win situation; but he also pointed out, this year's domestic PHEV model exports to the EU are expected to be close to 800,000, this export volume may drop next year, short-term pressure.

One point worth remembering is: The value of this consensus lies in reducing uncertainty, rather than raising the ceiling of export volume. Although the wording of the seven statements varies, they all point to the same thing — what enterprises truly need is not higher quotas, but an environment that can be calculated clearly; and after calculating clearly, their choice is all to build factories locally.