China’s commerce ministry reportedly warned the country’s carmakers of the risks of making auto related investments overseas at a recent meeting, two Reuters sources said.
At a meeting held in early July, the ministry told local carmakers not to invest in India, citing a directive from the central government, and “strongly advised” against investing in Russia and Turkey. They then used a more gentle tone to highlight risks in building factories in Europe and Thailand, according to one source.
It also encouraged carmakers to assemble cars in overseas factories from KD kits exported from China to mitigate potential risks stemming from geopolitical issues, said the source.
No advice was given to ensure core electric vehicle technology stayed in the country, as first reported by Bloomberg News on Thursday, the two sources told Reuters.
The ministry didn’t immediately respond to a Reuters query for comment.
As several European countries including Spain and Italy seek to lure investment from Chinese carmakers, companies remain cautious of independently setting up local production there, which requires a large amount of investment and a deep understanding of local laws and culture, Reuters noted.
Geely, China’s second largest automaker by sales, is scouting locations for a plant in Europe but has not committed fully to building up local production, its executives told Reuters in Frankfurt this week.
Leapmotor’s joint venture with Stellantis started EV production at the automaker’s Polish plant this year, the report added.
“China warns on overseas car plants” was originally created and published by Investment Monitor, a GlobalData owned brand.
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