Chinese suppliers, EV makers have big presence at Automechanika trade fair

FRANKFURT -- Nearly 900 Chinese suppliers and EV makers are showcasing their products at the Automechanika trade fair as China's auto industry defies looming trading barriers to expand its global footprint and counter eroding profitability at home.

Chinese automakers including BYD, Geely, Hongqi and GAC International are displaying their vehicles at the fair, which is being held in Frankfurt from Sept. 10-14.

China's auto sector is investing heavily in overseas expansion even as Europe and North America erect trade barriers to stem the inflow of China-made EVs they say benefit from unfair subsidies.

Automechanika's EV Expo was set up in partnership with the China Council for the Promotion of International Trade, an added feature to the event normally focused on suppliers.

"We want EVs made by Chinese carmakers, which are currently to some extent unknown, to gain trust in the industry," Olaf Musshoff, Automechanika's director, said in a press conference.

China's auto sector's share of China's total outbound investments rose from 16 percent in 2018 to 22 percent in 2023, according to a Moody's analysis, and car exports have reached record highs this year.

The large showing of Chinese suppliers - almost double the number of German suppliers in attendance - highlights their growing role in the global supply chain, with Chinese automakers increasingly planning local production in Europe and elsewhere to circumvent trade tariffs limiting imports.

A PwC study released this month warned that dwindling availability of equity was making it harder for suppliers in Germany to invest in innovative technologies, bogged down by a focus on cost efficiency.

Chinese companies -- often with state backing -- were more likely to spend on improving batteries and software, the study said, winning market share from German and Japanese companies.

Still, the size and scope of Automechanika Frankfurt -- with 4,200 companies attending from over 170 countries -- demonstrated Europe was still central to promoting innovation in the sector, said Frank Schlehuber of Europe's supplier association CLEPA.

"Frankfurt is still the center of gravity," he said.