Breaking News Summary

1. Another European automotive parts supplier plans layoffs.

2. Turkey announces new regulations for imported electric vehicles.

International News

1. Another European automotive parts supplier plans layoffs

Recently, Klaus Rosenfield, CEO of Schaeffler Group, a German supplier of automotive bearings, electric drive systems, and engine components, stated in an interview with Germany's "Wirtschaftswoche" that layoffs would occur following the merger with纬湃科技. According to the latest announcement, Schaeffler plans to officially merge with纬湃科技 on October 1st. Rosenfield said that the number of affected jobs is not yet clear, but it is expected not to exceed 10,000.

Following the plans of Continental AG,佛瑞亚, Valeo, Autoliv, ZF Friedrichshafen AG to lay off employees, another European automotive parts supplier, Schaeffler, plans to lay off employees. Regarding the reason for the layoffs, Rosenfield said that after the merger with纬湃科技, some positions might become redundant, "We don't need two headquarters. There is also redundancy in some functional departments. Therefore, we have to cut some positions."

Schaeffler previously emphasized that after merging with纬湃科技, it would save about 600 million euros annually, but not mainly from personnel expenses. Currently, Schaeffler Group has three main business divisions: automotive OEM division, automotive aftermarket division, and industrial division. In recent years, Schaeffler's expected profits in automotive parts business and industrial bearings business have been declining.

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Rosenfield believes that low-cost competition in China is intensifying. "For many years, our wind turbine bearings business in China has been quite profitable. However, the Chinese market is continuously developing, and competition is intensifying. Suddenly, some new players have entered this field; they may not be able to guarantee the same quality as us, but they can provide products at significantly lower prices, sometimes more than 25% lower." But he said that this does not mean Schaeffler will exit the Chinese market, but the company will have to operate with lower profit margins, and Schaeffler must accept lower profit margins in China in the future.

2. Turkey announces new regulations for imported electric vehiclesRecently, the Turkish government issued a communiqué announcing new regulations on imported electric and hybrid passenger cars, which will take effect within 30 days. The communiqué indicates that the Turkish Ministry of Trade has further expanded restrictions on imported electric vehicles, including hybrid passenger cars and charging passenger cars. According to the new regulations, Turkish importers must establish at least 20 authorized service stations for after-sales assembly, maintenance, and repair of imported vehicles in seven different regions within the country to be approved for importing electric vehicles.

Tariffs have become one of the focal points for Chinese car companies during their "going global" process. In recent years, in March 2023, Turkey announced an additional 40% surcharge on electric vehicles imported from China, raising the total tariff to 50%. On June 8, 2024, Turkey announced the expansion of this policy from electric vehicles to all Chinese imported cars (including car parts), with tariffs less than $7,000 being charged at the standard of $7,000, effective from July 8 of this year. In early July, Turkey issued a presidential decree on "Amending the Decision on Imposing Additional Tariffs on Imported Products," stipulating that no additional fees will be imposed on car imports within the scope of investment incentive policies, and it will take effect immediately. Car manufacturers who invest and set up factories in Turkey will enjoy investment incentive policies, without having to pay the previously stipulated 40% additional tariff, and only need to pay a 10% tariff.

Behind Turkey's frequent adjustments to its policy on imported electric vehicles is the continuous expansion of China's new energy vehicle exports. Analysts say that currently, no importer can meet these conditions, which will put pressure on Chinese car manufacturers. Erol Sahin, founder of EBS Danismanlik consulting firm, believes that the Turkish government is sending a "speed up the process" signal to Chinese car companies negotiating localization production.

In July, BYD signed an investment agreement with the Turkish government to build a factory. BYD will invest $1 billion (approximately 7.273 billion yuan) to establish an annual production of 150,000 vehicles and a research and development center in Turkey. The factory is planned to start production by the end of 2026 and will employ 5,000 workers.