Hyundai chief says fair competition could curb impact of Chinese rivals
Hyundai chief executive José Muñoz says fair competition and stronger products could help limit the impact of Chinese carmakers if they enter the US market. He warns that, without protections, affordable Chinese imports could put pressure on established manufacturers, but says he is not adopting a China-specific strategy.
Muñoz points to Hyundai’s efforts to cut costs by making more components and technology itself, including a $5.8 billion investment in green steel production in Louisiana. Chinese cars in Europe are about 30 per cent cheaper than comparable European models on average, despite EU tariffs. Electric vehicles make up over 20 per cent of sales in Europe and over 60 per cent in China, compared with less than 6 per cent in the US.
- Muñoz says fair competition could help Hyundai face Chinese rivals.
- Hyundai has not made a China-specific defensive strategy.
- US electric car sales remain below 6 per cent.
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Chinese carmakers, particularly those producing electric vehicles, have become increasingly competitive globally. They represent a potential threat to the US car market if they were to enter with lower-cost vehicles.
In Europe, Chinese-made vehicles are already substantially cheaper than locally produced competitors, even after tariffs. Electric vehicles now represent the majority of new car sales in China and a significant share in Europe, though they remain a small portion of the US market.
Established manufacturers are responding by investing in their own operations. This includes developing more efficient production methods and advancing their own technologies.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Chinese carmakers operate with substantial state backing and can produce vehicles 30 per cent cheaper than comparable Western models even after tariffs, representing asymmetrical competition rather than fair market rivalry. Without protections, this structural cost advantage threatens established manufacturers and the employment they support, displacing jobs and investment built up over decades in Western economies. When one side benefits from government industrial policy whilst the other does not, tariffs and protections are justified levelling mechanisms to preserve a genuinely competitive market.
The case against
Rather than seeking protection, manufacturers should respond to competitive pressure by improving products and efficiency through investment and innovation, as Hyundai is doing with vertical integration and technology development. Protectionism leads to higher consumer prices, stifles the innovation that has long driven the automotive industry forward, and prevents companies from addressing real competitive challenges through better strategy. Competition benefits consumers through choice and affordability, and companies that respond to Chinese challengers with superior vehicles and lower costs will ultimately thrive.
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Originally published by The Verge as “Hyundai CEO says only a ‘level playing field’ can minimize damage from China”.