ALL NOVEL Chapter 446: EU Industrial Punch
“Representative Hornby said is right!” A tycoon in the auto industry continued to say, “This month, German auto industry’s operations in East Asia began to shrink significantly. It is said that China Pengyun Auto and Red Letter Group is premeditating to create a new magnetic levitation traffic system that will radiate the world from China.”
“This is a dangerous signal. In the magnetic levitation automotive industry, we are still blank and large enterprises in our country and other European countries are constantly providing them with sophisticated auto parts and other technical support to develop faster.”
“Containment measures must be taken!”
Other leaders of the German Automobile Industry Association also nodded, although in the short term, the export of parts and related technical equipment to China’s automotive industry can get a lot of benefits. But looking at long-term, if Chinese automobile manufacturing industry replaced the status of Germany, they will lose more!
The meeting reached a consensus that the emerging automobile industry in the East should be contained and the status of their automobile industry should be maintained.
The meeting was only the beginning. The content of this meeting quickly caused discussion and research in German Ministry of Economic Affairs and Industry.
The results of the study are also not optimistic. They are surprised to find that in the automobile industry and the machinery industry in certain country in the East is rapidly emerging at a speed that is beyond the historical development track.
This month, initiated by Germany proposal, European Commission convened an economic meeting of member states to discuss the issue of export and technology transfer in the automotive industry and machinery industry.
The following month, European Commission submitted the latest “Regulations on the Automotive Manufacturing and Machinery Industry Regulations of EU Member States” to European Parliament and the Council of European Union, which was quickly approved and implemented.
The EU officially announced the treaty to the world. Most of them are adjustments to the export regulations for industrial products. For developed countries such as the United States, the impact is not significant.
Many of these regulations are aimed at China’s high-end industrial and automotive manufacturing industries.
China has been developing the industry for decades, and most of the basic industries can manufacture itself. The biggest gap with developed countries lies in high-tech and finishing.
In the treaty, export tariffs on related products have been added, and restrictions have been placed on technology and precision equipment. Originally, some technologies and equipment that can be opened to China have added technical protection barriers. As for higher precision and technical content, it is forbidden to sell and authorize knowledge.
As soon as the “Regulations on the Standardization of the Automotive Industry and Machinery Industry of EU Member States” came out, there was an uproar in China.
This is another technical pressure from the developed countries after China’s last increase in tariffs on the Chinese information technology industry.
The Ministry of Foreign Trade of China issued a statement on the same day, stating that such a treaty would seriously affect the economic and trade exchanges between the European allies and China.
The EU’s external spokesperson said: “This treaty norm is not aimed at a certain country or region, but an adjustment of the industrial industry within EU member states to cope with the new era of industrial development.”
From the outside, the treaty does not have any excesses. However, only those who are familiar with China industrial system know that a little price or a small difference in technology will bring a huge burden to China industry.
Lu Zixin received the report as soon as possible, Red Letter Group itself will not be affected too much, but his newly planned automobile industry will face a huge crisis!
In the office, the assistant has already prepared the information and reported to him.
“This EU treaty will directly increase our industrial production costs, which is expected to be around 3% to 5%! This will lead to a large number of small businesses going bankrupt, the cost of large enterprises will increase, and the profit margin will be reduced.”
“The most terrible thing is the automotive industry. This is a big punch will make us crippled!”
The assistant projected the arranged information and continued: “Automobiles and auto parts are the second largest industrial products imported by China, accounting for more than 6% of industrial imports! In Pengyun automobile industry chain, many key components are imported.”
“In terms of domestic automobile industry, China’s largest auto company has less than one-half of the annual profit of German Volkswagen! China independent auto brand sales have reached one-eighth of the world’s highest level, most of which are Sino-foreign joint ventures. Foreign technology and parts production.”
“And several major industrial countries in EU are important sources of our components.”
Lu Zixin quickly browsed the past information. In terms of vehicle sales, Pengyun was not affected much. The most important thing is the parts.
Global auto parts manufacturers, so far ranked in top 100, only two Chinese companies! The remaining 98 houses are all foreign companies!
Pengyun Auto’s core technologies such as driverlessness, motor, battery energy, etc. are in their own hands, but it is undeniable that there is no imported auto parts, Pengyun auto-driving cars can only be reduced to low-end cars.
“According to our calculations, after the implementation of this regulation, we will increase the import cost of up to 30-40 auto parts, and the six key parts may face a shortage of products. The direct cost is increased by 13,8%. Indirect costs cannot be calculated temporarily.”
Lu Zixin tapped his finger on the table and thought quickly in his head. He wants to promote the industrial revolution, and he will surely encounter resistance, which he has long anticipated.
Only he did not expect that this time EU shot faster than United States!
China must rely on imported industrial products, the number one is the integrated circuit! In this regard, the Red Letter Group has already collided with United States and has achieved considerable results.
This time, it was the second largest industrial product, the collision between the automobile and auto parts industry and the world. The EU has already taken action, and it will not take a long time for the developed countries such as United States to introduce various restrictions and joint pressures.
This time, the pressure that Red Letter Group will face will not only come from EU, but also the joint restrictions of many developed countries. It is necessary to suppress China industry, especially the development of automobile industry chain led by Pengyun Automobile.
Lu Zixin asked: “How many of these parts can be adjusted?”
The assistant quickly rummaged through the data and shook his head: “There are only seven kinds that can be adjusted to Japan and United States. In terms of price, it will also rise.”
“What about the domestic side?”
“The domestic component manufacturers, the accuracy and strength of their components are one level lower than our standard.” The assistant said, “Our fully-automobile cars requirements for auto parts are higher than those of high-end vehicles on the market, and there is too much dependence on imported parts.”