There is no Volkswagen, but there is China’s BYD. The Euro’s Great Turn

During Euro 2020, the ball was delivered to the pitch by a German Volkswagen car before the match. Now the giants don’t play football at all. Last year, Volkswagen decided not to cooperate with UEFA in the run-up to the 2024 European Championship. The company’s authorities considered “financial discipline” more important, which was exploited by BYD, the world’s largest electric car manufacturer. UEFA decided to sponsor the tournament with the Chinese giant.

In a few days, BYD brand will appear at the 2024 European Cup European Commission threatens temporary tariffs on Chinese electric vehicles According to the European Union, Chinese producers pose a threat to European companies due to Beijing’s “unfair subsidies” to Chinese companies in the sector.

The rest of the article is below the video

First, Brussels will try to reach a deal with China, but if China does not budge (and that seems unlikely), from July 4 The EU will impose a tariff of 17.4% on BYD Auto, 20% on Geely Auto (20%), and 38.1% on SAIC Motor. Other Chinese electric vehicle makers that cooperate with the EU investigation will be subject to a 21% tariff, while those that do not will be subject to a 38.1% tariff.

Last year, BYD outsold Volkswagen in China in terms of electric car sales, and so far the Germans have done well in this market. Customers are not interested in what is subsidized by the government and what is not. They want to have a choice and opt for cheaper products. Therefore, Vivo and Xiaomi smartphones are popular, their quality matches the price – commented Michał Banasiak, an analyst of sports and political relations, in an interview with Money.pl.

Vivo is another important Chinese partner of the UEFA Euro 2024. The following companies should also be added to this list: Hisense (electronics and home appliances promoted by German goalkeeper Neuer), Alipay (Chinese e-wallet for online shopping) and the global shopping platform AliExpress, whose ambassador is David Beckham. In addition, the smaller electric car manufacturer BAIC Group may also join the list.

Poland is also strengthening its ties with the Middle Kingdom. Recently, the PZPN signed an agreement with the Chinese electronics company TCL – for which he is an ambassador. Simon Marcignac.

– During the last European Championship, Chinese companies appeared on advertising banners – Michał Banasiak reminds. – This is a trend that will develop. The top scorer of the German team will receive a statuette inspired by Chinese culture from AlipayBeijing clearly wants to showcase itself in the European market and prove that Chinese brands are quality products, rather than just “Chinese”. He said that years ago, Sony and Kodak were promoted at football events and were associated with good quality.

Jakub Jakobovsky, deputy director and director of the China Center for Oriental Studies, added that the advertisements during the Euro period confirm China’s ambition to enter Germany, Europe’s most important automotive market.

Sponsorship is important from the perspective of Chinese expansion. The recognition of Chinese brands in the Old Continent is Beijing’s Achilles’ heel. BYD is well-known, the others are less so. Speaking to Money.pl, Jakobovski explained that promotion at such events is essential to gain recognition in the European consciousness.

OSW analysts stressed that China has a competitive advantage over its EU competitors, which has been confirmed by the EU’s anti-subsidy investigation. Chinese companies are mainly state-subsidized.

– In this way, the Chinese have created a technological advantage and increased the scale of sales. One in three cars purchased in China is an electric car, and Beijing also dominates the production of batteries for electric cars. However, the tariffs announced by the EU will not stop the development of Chinese exports, but only slow them down. BYD’s profit margin in Europe is very high, even 10 times higher than in China. Once tariffs are imposed, the profit margin will increase sevenfold.To stop the expansion, tariffs would have to reach 50% or even 100%. Just like in the United States – says Jakóbowski.

However, the Germans would not agree to this.

– Most German companies fear retaliation from Beijing and do not want to impose tariffs on China. This is an important market for them. However, the French want to force Beijing to invest in Europe and perhaps transfer technology. These are two completely different approaches. Chinese-made cars account for 19%. European electric car sales are expected to reach 25-30% in the next few years. – OSW experts emphasize.

BYD enters Europe with a higher profit margin because it is still competitive. If Chinese producers want to capture the market, they can significantly reduce prices, there is a lot of room for this. In China, the cheapest BYD Seagull costs 10,000 PLN. USD, which is about 40,000 PLN – Jakóbowski calculates.

Michał Banasiak, in turn, points out that some German economists are happy about the competition from China, because it means that Volkswagen has to take consumers into account more. But on the other hand, our Western neighbors emphasize unfair competition.

– There is a feeling that the German companies that were once the best in the world are now in the shadows. BYD pushed Volkswagen aside and earlier decided that Nike would replace Adidas as the technical sponsor of the German national team. For 70 years, Adidas Germany has been outfitting national team players. Banasiak recalls that in the 1954 European Cup final, the company boss himself screwed corks into the players’ shoes, a revolution that is believed to have won the tournament for Germany.

The news of abandoning Adidas in favor of the American Nike in 2027 shocked the Rhineland. Economics Minister Robert Habeck said Adidas “is part of German identity.” Health Minister Karl Lauterbach also agreed with his view. – Commercialism is destroying traditions and parts of our homeland – X wrote on the website.

Money is the deciding factor. Nike’s offer could be twice as much as Adidas’. This is similar to the situation in Poland, when Polish manufacturer 4F sparked outrage by not supplying jerseys for the Olympic team. Banasiak commented that this will be done by Adidas, which is outperforming its competitors.

Henning Vopper, director of the German think tank European Policy Network, spoke to DW in a similar tone. – UEFA makes its decision based on two criteria: Who makes the biggest offer? And who is strategically interesting? – he explained.

And China offers the most.

Beijing has strong financial and production capabilities, which is why Chinese companies are increasingly competing against each other at major sporting events. Especially when he is looking forward to President of the People’s Republic of China.

– Xi Jinping is a big fan of football and sports. Beijing is politically in agreement with promoting sports so it will be used as an element of soft power. They are not as good at promoting pop culture as Japan and South Korea, so they focus on sports. AliExpress is a sponsor of Lech Poznan. Sports fans are often technology and car enthusiasts, and companies in these industries promote themselves at the European Cup. China has thought of everything, explains Sylwia Czubkowska, author of “The Chinese have a hold on us. The first investigation into how China is colonizing Europe, including Poland.”

– In the stands will be politicians, businessmen and lobbyists. It’s an emotional event for fans, but for some, it’s big business. Behind the scenes, some will lobby for tighter regulation of Chinese companies, who will certainly work to thwart politicians’ attempts, Banasiak said.

The ball is in China’s court.

Piotr Bera, money.pl reporter