Chinese media reports that SAIC is negotiating with Spain’s Ministry of Industry to build a factory in the country to produce MG cars. Reports claim that SAIC Motors will make a decision by September 30. Other countries still in the running include Hungary and the Czech Republic, which have lower labor costs.

SAIC intends to make the decision soon so that construction of the plant can begin, with plans calling for the first vehicles to be produced in the fourth quarter of 2027. The decision is a direct result of the EU’s investigation into Chinese subsidies of EVs, which hit SAIC with the highest temporary tariff of 37.6%.

Although SAIC cooperated with the investigation, it still received the highest tariff rate, which is equal to that of companies that did not cooperate with the investigation. While some claim the rate is because SAIC has the largest import volume to the EU, the more plausible reality is that SAIC did not release core information, including battery data, in accordance with the EU’s requirements.

Previously while the EU investigation was underway, SAIC Chairman Wang Xiaoqiu said at the 2023 shareholders meeting that SAAC would not give up the EU market. By building a factory in an EU member state, SAIC will no longer be affected by tariffs.

Last year, SAIC’s MG 4 was the sixth best-selling BEV within the EU, selling 72,421 cars. This model will almost certainly be produced at the new factory in Europe, along with possibly the recently declared MG S5 SUV. Another likely car to be produced in the EU is the successor to what is known as the MG 5 in Europe (Roewe Ei5 in China).

The EU tariffs were announced in June and commenced on July 4. There was a slight decrease in the level of tariffs from the level initially announced in June with the rate for SAIC dropping from 38.1% to 37.6%. The tariffs introduced earlier this month are meant to be a temporary measure until more permanent tariffs are introduced in November this year. Under the current tariffs, BYD is subject to 17.4%, Geely 19.9%, companies that cooperated but didn’t receive an individual figure 20.8%, and 37.6% for those who did not cooperate.

MG recently celebrated its centenary at the Goodwood Festival of Speed, in the UK with much fanfare. It is a further blow to British industry that a brand with such British heritage will site its European production plant outside the UK.

Source: Fast Technology