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The Chinese manufacturers will focus on the price to enter the European market, but they will not have to bleed out, thanks to the space left by the European manufacturers who, after having accustomed the customer to an entry threshold of around ten thousand euros for a city car, in the post-Covid abandoned this segment of the market, some by raising prices and some by leaving the segment.
It was announced that the Chinese car would land in Europe. Five years ago, while European manufacturers were rubbing their hands over the growth of the Chinese market which was absorbing millions of cars, someone pointed out the imbalance: in world car trade, China accounted for 6% of imports and just 0.6% % as export. It was the result of the competitive advantage of the Europeans on engines and gearboxes, which could not be filled in a short time but no less intolerable for this. But in a few years the music has changed.
First, the electric breakthrough weakened European manufacturers, draining hundreds of billions of investments. The regulator pressed the button but under pressure from environmentalist movements, very well organized and lavishly financed by no one knows who. The suspicion is there, the clues too but no proof. On the other hand, it is certain that European industry has given up on defending itself and its workers.
Then Covid, chips and war slowed down production and offered the industry, which needed more money than sales, the opportunity to raise prices and choose which machines to sacrifice. Obviously small cars, the weak link in profitability where to earn little you need a lot of volumes, planned production, use of plants, low costs and super-efficient logistics.
In Italy, the queen of the small cars is the Panda, whose average net market value increased by 28% in the three-year period 2020/22, between increases in price lists and reductions in discounts, including zero kilometers and despite the incentives that have limited the bass. In a nutshell, the European market had a gateway to 7/8 thousand euros. Now, thanks to the repositioning of the offer, the goal is around 10/12 thousand: take a seat, Dragon!