The impact of China's car exports on the European automotive market is not on Europe itself, but on other regions; the euro should depreciate to compete.
This is a chart listed by Robin Brooks. China's car exports to the Eurozone have increased, but not as much as its exports to Brazil. Moreover, exports to Europe have leveled off in recent years, apparently having been restricted.
Figure 2: After 2020, China's car exports to developed countries have doubled, but those to other regions have quadrupled. Looking closely at the growth rates on the right, the blue line represents the growth rate of exports to developed countries, which has nearly stopped recently, with all growth driven by exports to other regions.
Therefore, the real competition is in other countries, not in developed countries. The momentum of China's car exports in the developed market has already been restrained. However, European cars need to compete with Chinese cars in other regions.
Robin Brooks believes that the euro should depreciate in order to compete with Chinese cars.
Original source: toutiao.com/article/1852668335348746/
Disclaimer: This article represents the views of the author alone.