Guest commentary: Companies are expanding their business in China and scaling it back in the EU.
In China, Europe's industry is seeking competitive advantages. This risks weakening itself and Europe's position, warns Merics analyst Andreas Mischer. Now it's the EU's turn to act.
European companies, particularly German ones, risk undermining the continent's efforts to reduce economic vulnerability to China by expanding their businesses there. Despite benefits such as access to a large market and lower costs, this expansion comes at the expense of Europe. German automakers, including Volkswagen, have established significant operations in China, with Volkswagen operating its largest research and development center outside Germany in Hefei.
However, the companies are struggling to gain market share, with Volkswagen, Mercedes-Benz, and BMW experiencing sales declines of at least 30 percent in the second quarter of 2026. As a result, Volkswagen's joint ventures with SAIC had an utilization rate of only 58 percent in 2025.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
