The boss of Mercedes-Benz said the European Union should encourage Chinese carmakers to open more factories in the bloc as part of a deal to lift punitive tariffs on electric vehicle imports from China.
Ola Källenius, who is also president of the EU's auto industry body Acea, said China decades ago required European carmakers to invest domestically to gain access to its market, a practice that could form part of a resolution to the trade dispute.
“No one disagrees with the fact that a level playing field is a legitimate discussion. The question is, what tools do you use?” Kallenius told the Financial Times in an interview. "Don't accelerate protectionism because... we have a lot to lose."
In October, after a surge in sales, Brussels imposed tariffs of up to 45% on Chinese electric vehicle imports, accusing them of being unfairly subsidized and launched multiple anti-dumping and countervailing investigations. Beijing responded by imposing anti-dumping duties on brandy and launching investigations into pork and dairy products.
German carmakers have been the strongest opponents of protectionist measures, fearing retaliation from Beijing and denting consumer interest in the country as the rise of Chinese brands leads to a sharp decline in sales.
They also struggle to compete with more affordable and advanced Chinese electric vehicles made by companies such as BYD.
In the 1980s, when German automakers sought to gain a foothold in the emerging Asian economies, they agreed to form joint ventures with Chinese partners. Kallenius said it was a decision for EU policymakers whether to propose reciprocal arrangements.
"When we came to China . . . the policymakers appealed to us: If you want to capture the market, industrialize here. As I understand it, European policymakers said the same thing to the Chinese," he said .
"I think these are legitimate conversations, but what it means is that you actually open up the market and create as level a playing field as possible and then let the best market players win."
Brussels also plans to implement standards requiring Chinese companies to set up factories in Europe and share technical know-how. BYD plans to build cars in Hungary, while CATL recently agreed to build a 4.1 billion euro lithium battery factory in Spain with Stellantis.
Kallenius said the tariffs would hurt the industry and Brussels should reach a compromise with Beijing on a deal to lift them, adding that China had become an integral part of the global automotive supply chain, including raw materials, advanced chips and components.
"We just want to remind policymakers not to forget what makes us so successful in this complex world," he said.
Assia last week sent a letter to EU leaders urging them not to retaliate against U.S. President-elect Donald Trump's threat to impose tariffs.
Mercedes-Benz is one of Germany's three largest automakers, along with Volkswagen and BMW, and has significant operations in China and the United States.
Geely and Chinese government-controlled BAIC Group own a fifth of Mercedes-Benz. The automaker also relies on the Chinese market for about 30% of its global sales.