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Investing.com -- The Chinese electric vehicle behemoth BYD (SZ:002594) is contemplating Germany as a potential location for its third assembly plant in Europe, Reuters reported on Monday, citing a source.
This comes after Germany, the largest economy and car market in Europe, resisted European Union tariffs on China-manufactured electric vehicles (EVs) last year.
Chinese automakers are keen on establishing manufacturing and assembly plants in Europe, the report said, adding that the move is aimed at increasing the sale of their lower-cost cars in the region, posing a challenge to their European counterparts.
The report also said that the strategy is being adopted as the demand for cars in China, the world’s largest car market, is experiencing a slowdown. Another reason behind this move is to bypass the import tariffs that the EU imposed on China-made EVs last year.
Earlier this month, Stella Li, the executive vice-president of BYD, mentioned in an interview with Automobilwoche that the company is considering a third facility to cater to the European market within the next two years.
The source told Reuters that Germany is the top choice for BYD for the location of its third plant.
However, the decision is still under deliberation internally due to Germany’s high labor and energy costs, low productivity, and low flexibility. A final decision on the matter has not been made yet.
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