Companies · · 2 min read
VW chief urges France and Germany to team up on Chinese car threat, FT says
Oliver Blume wants Paris and Berlin to work together as Chinese brands flood the Paris Motor Show. Chinese carmakers have nearly doubled their European market share in a year.
The short answer
Volkswagen boss Oliver Blume has called on France and Germany to cooperate in fighting back against Chinese carmakers, the Financial Times (FT) reported, on the eve of the Paris Motor Show. A record 20 Chinese brands are exhibiting, and their European market share has risen to 10.7%, putting pressure on European car stocks.
What’s going on here?
The Financial Times (FT) reported that Volkswagen chief executive Oliver Blume wants France and Germany to join forces in responding to Chinese competition, pointing to the two countries' record of finding joint solutions when it counts. His comments come as the Paris Motor Show opens to the press on October 12. Reuters reported that a record 20 Chinese car brands will attend, twice as many as at the 2024 show. Chinese marques now hold 10.7% of Europe's car market, nearly double their 5.7% share a year before and more than Japan's makers, Schmidt Automotive Research figures for April to June show. Volkswagen is cutting thousands of jobs and weighing factory closures.
What does this mean?
Blume's appeal matters because the policy fights ahead will be settled at EU level, and France and Germany are home to Europe's biggest carmakers. A shared position from Paris and Berlin would carry weight on the questions now on the table: whether to widen tariffs, and how strict new local-content rules should be.
The pressure is real. Brussels imposed duties on fully electric cars built in China two years ago, yet Chinese brands simply leaned into plug-in hybrids and petrol models that escape those duties. In Western Europe, they now account for more than 26% of plug-in hybrid sales, compared with 2.2% two years ago, Reuters reported. European makers now want tariffs extended to those hybrids, and the EU is drafting Made in Europe rules that would tie subsidies to minimum local content.
Demand is shifting at the same time. Fully electric cars made up 21.7% of new EU registrations in the first eight months of 2026, up from 15.8% a year earlier, according to the European carmakers' association ACEA. High oil prices tied to the Iran conflict are speeding that shift but also squeezing margins, and China is no longer the profit engine it once was for German brands.
European makers are also hedging. Stellantis has partnered with China's Dongfeng, and others are selling spare factory capacity or tapping Chinese EV technology, a strategy one Gartner analyst described as a double game.
The bull case
A united Franco-German stance could make EU protection more likely, such as tariffs on Chinese plug-in hybrids and local-content rules, which would give European carmakers time to roll out cheaper electric models. Fast-growing EV demand in Europe is a large prize, and new affordable launches at the Paris show could help European brands win back buyers.
The bear case
Chinese brands have kept gaining share despite existing tariffs, and more barriers could invite retaliation against European exports to China. Volkswagen and BMW are already cutting jobs, and high oil prices and weak consumer confidence are squeezing margins. If cheaper Chinese models keep winning customers, European carmakers could face years of lower profits and further restructuring.
Why should I care?
For markets:
European car stocks such as Volkswagen, Stellantis and Renault are sensitive to any shift in EU trade policy, while Chinese makers like BYD stand to lose if tariffs widen to hybrids.
The bigger picture:
For car buyers, Chinese competition is bringing more choice and cheaper electric models, but tougher EU trade rules could slow that trend and keep prices higher.
Market impact
| Asset (ticker) | Potential direction | Timeframe | Confidence | Reason |
|---|---|---|---|---|
| Volkswagen (VOW3) | ↔ neutral | Long term | Low | Possible EU protection helps, but rising Chinese share and restructuring costs weigh on profits. |
| Stellantis (STLA) | ↔ neutral | Long term | Low | Competes with Chinese brands while partnering with Dongfeng, so policy cuts both ways. |
| BYD (1211.HK) | ↓ bearish | Long term | Low | EU tariffs on plug-in hybrids would target a segment where Chinese brands are growing fast. |
Potential impact, not investment advice.
Frequently asked questions
Why does Volkswagen want France and Germany to cooperate?
According to the Financial Times (FT), VW chief Oliver Blume believes the two countries work best when they act together against a shared problem. A joint Franco-German position carries weight in shaping EU trade policy, including possible tariffs on Chinese plug-in hybrids and local-content rules.
How much of the European car market do Chinese brands have?
About one in ten new cars sold in Europe from April to June carried a Chinese badge: a 10.7% share, against 5.7% a year before, Schmidt Automotive Research data cited by Reuters show. That is now more than Japan's carmakers sell in the region.
Do EU tariffs apply to Chinese hybrid cars?
No. The EU's tariffs introduced two years ago cover Chinese-made fully electric cars. Chinese brands have since grown in plug-in hybrids, taking over 26% of the Western European market in that segment, and European carmakers are lobbying for tariffs to be extended.
Sources: Financial Times, Reuters via TimesLIVE, Euronews
