MINI

Mini Cooper E and SE could be 38.1% more expensive in the European market because they are currently manufactured in China

The European Union has already announced provisional tax increases for cars manufactured in China and imported into Europe, which can vary between 17.4% and 38.1%, adding that the definitive rates will be announced after the 4th of July. And these will potentially be higher for Chinese brands that receive greater incentives from the State, if they are not willing to give up this aid considered illegal by the World Trade Organization (WTO).

It is true that all Chinese brands should be penalized by these taxes — although less in Europe than in the USA, which promised to increase taxes on imports of models from China from 25% to 100% —, with the exception made for BYD through of the vehicles it will produce in the Hungarian factory it is building in Europe, which will exempt it from taxes. But, in addition to the obstacles to Chinese manufacturers, this trade war with China will also cause significant losses to European brands that manufactured in China, to benefit from lower production costs, and then sell them on the European market.

According to Reuters, among the European manufacturers that are at risk of losing out due to the current trade war, the highlight goes to Mini, which produces in the factory it owns in China as a result of the joint venture established with the Chinese company Great Wall Motor. (GWM), facilities from which battery operated Coopers are produced. And these Mini will be subject to a tax on arrival in Europe of 38.1%, with a tendency to increase rather than decrease, because GWM is a state-owned company that, to avoid admitting subsidy fraud, chose not to collaborate with the investigation by European authorities.

The Mini Cooper E and SE are relatively affordable models, with the cheapest version being offered for 35 thousand euros and the SE, the most powerful, being sold for 38 thousand euros. With the new taxation, the price of the Cooper E is expected to rise from 35 to 48 thousand euros, while the Cooper SE would jump from 38 to 52 thousand euros, values ​​that place these trams completely out of the market. Unless Mini is willing to assume a (very considerable) part of the increase in costs due to additional fees, especially since it was precisely to reduce the price of vehicles (and increase profit margins) that the BMW Group relocated manufacturing of Mini's trams for China, both the Cooper and the new Aceman.

And if Mini seems to be the one suffering the most, the reality is that within this German group, BMW also manufactures the iX3 in China, which it exports to Europe. This SUV, currently proposed for 77 thousand euros, would be sold for 106 thousand, unless a miracle happened, which is to say, if BMW opened its purse strings and reduced the profit margin.

The CEO of the BMW Group, Oliver Zipse, argued that “increasing taxes on Chinese vehicles is the wrong strategy”, in a statement that may indicate some concern about the loss of competitiveness of its trams produced in China and exported to the Old Continent. However, the CEO's stance may still have to do with the fear of possible retaliation from the Chinese on high-end SUVs and saloons exported from Germany to China, a market on which BMW depends greatly, like other premium manufacturers Germans.

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