The carmaker also has to battle to protect its key European market from Chinese encroachment.
With the U.S. effectively blocking Chinese cars thanks to steep tariffs and a ban on connected cars, Beijing’s carmakers are on the hunt for new customers — and have set their sights on Europe.
“We will need to do more because our costs are still too high in Europe, and we have to pitch ourselves against our competitors in Europe,” Blume said, adding that includes Chinese brands “because it’s a big business potential here for the Chinese in Europe so we have to fight back.”
Volkswagen and its German peers have strong brand loyalty in their home market, but Blume warned it’s only a matter of time before Chinese automakers begin making inroads.
It’s a war Volkswagen is already fighting in China, which was once its biggest market and revenue stream. However, the shift to electric vehicles and Chinese consumer preferences for domestic brands has chipped away at Volkswagen’s standing. VW is launching new EVs in China this year as it looks to regain its place as the country’s top automaker.
But losing its place at the top of the podium in China has meant considerably less revenue is making its way back to Germany and helping to fund factories that have higher energy and worker costs.