The EU Commission has opened an investigation into the new car manufacturing plant by the Chinese firm BYD in Hungary. The focus of the probes is drawn by concerns on the possibility of the project having benefitted from subsidies outlawed under the laws of the European Union and hence gave an unfair inclination to the competition.
Chinese automaker BYD is currently in the process of rapid growth as a supplier of electric vehicles (EVs) and aims to further increase its sales in Europe. Building strategic objectives, BYD looks to forge a great market base on the continent. The company has specifically announced the construction of two plants in Hungary, Turkey, and possibly a third in Germany. It is the company’s strategy to start the production of cars in the European market this year, which will help it avoid the tariffs set by the EU on EVs from China.
As reported by Reuters, only its part relating to the factory in Hungary is at the center of the EC investigation, which may start manufacturing as early as 2025. This could further pose some risks where the company may be put at an increased risk of having its production capacity cut, forced to repay the given subsidies, and penalized.
Additionally, BYD has shown its strategic plan to start operating in Romania with three models, namely the Sealion 7, Seal U DM-i, and Atto 2. The type of models to be manufactured in Hungary is unknown but BYD’s plan shows that the company wants to open a campaign and capture a better market share in Europe.
In a remarkable strategic direction, BYD has proposed a plan to outcompete the Romanian manufacturer of cars, Dacia, within the next five financial years. This ambitious target proves BYD’s competitive advantage and the firm’s business model of expanding its market share in Europe.
Mr. Wang said BYD was the world’s biggest manufacturer of NEVs and that the company sold 4,272,145 electric cars and PHEVs last year. This puts the company ranking third in the world in automobile production The foregoing statistics exclude sales outside the year 2024. The case of the investigation undertaken by the European Commission on the Hungarian factory reveals the issues and legal issues that BYD encounters as it grows its operations. This investigation will continue to affect the strategic steps of BYD and its future plans in the European market.
