Free trade means lower prices and more innovation

BARELY a conversation with an auto industry exec passes these days without mention of the influx of Chinese cars. Many are here, more are coming.

It’s been a hot topic in many of the annual media conferences the car companies hold at this time of year to crow about their financial results. And it comes as the EU is reportedly close to imposing additional tariffs on Chinese cars, amidst claims that the Chinese Government is subsidising EVs exported to Europe. Of course, where the EU leads, the UK may well follow.

So what’s the industry view? Speaking at Volkswagen’s annual conference, boss Oliver Blume described tariffs as “potentially dangerous”. “We’re in favour of free, fair world trade with everyone following the same rules,” he said. “We are not in favour of protectionism.”

Mercedes boss Ola Källenius went even further, telling the Financial Times: “Don’t raise tariffs. I’m a contrarian. I think go the other way around: take the tariffs that we have and reduce them.”

Perhaps most exciting of all was what Fiat and DS CEO Olivier Francois told us when we caught up this week. “I see it as a challenge to do better and quicker,” he said.

We already know that car makers are upping their game in reaction to the way Chinese makers develop their cars. VW, for example, is cutting the development time for its newest models from 54 months to 36.

Competition is healthy; it drives rivals to new levels of excellence, and that can only benefit the consumer.

Sure, it will be a big challenge for British and European car makers, but I have every confidence that brilliance will prevail. And I hope we’ll see even better and more affordable models from the established brands.

Plus rather than penalising some makers, governments can support the whole industry with incentives across the board. As one exec told me, EVs sell well in the countries with incentives, not the ones without.