[New York = E-Daily Seong Joowon Correspondent] Chinese auto parts manufacturers are quietly expanding their influence over Europe’s automotive supply chains. As European restrictions on finished product exports intensify, these companies appear to be circumventing the restrictions by acquiring local parts manufacturers.

The UK’s Financial Times (FT) reported on the 11th (local time), citing data from the consulting firm Rhodium, that Chinese companies have acquired more than 130 European auto parts companies since the mid-2000s. These acquisitions have primarily been concentrated in key production hubs such as Germany and France. The scale of these acquisitions peaked in the mid-2010s with Geely Automobile’s purchase of Volvo Cars ($1.8 billion, approximately 2.5461 trillion won). However, due to China’s restrictions on overseas investment and the strengthening of European trade barriers, most transactions over the past decade have been small-scale deals worth less than 100 million euros (approximately 163.2 billion won). Some observers point out that because these transactions fell below the threshold for intervention by European Union (EU) regulators, they have managed to evade scrutiny.
Some analysts suggest that actual control may be greater than is commonly known. Pali Mesko, CEO of corporate intelligence firm Sayari, told the FT that among Chinese-owned assets in Germany, “about four-fifths are held through offshore intermediary entities or German-registered holding companies operating under local names.” Sayari analyzed 62 Chinese-owned companies in Germany and confirmed that such clusters have formed at major production hubs. It was found that 23 Chinese groups have acquired high-tech component manufacturers, including those producing high-end engine gaskets, autonomous driving systems, and wireless communication antennas.
EU officials and the automotive industry are wary of this trend. One EU official told the FT that the threat from China to the automotive sector is “Europe’s biggest challenge of the decade.” According to this official, China is penetrating the European market through a four-pronged strategy: expanding exports, acquiring stakes in local companies, establishing joint ventures, and building factories both within and outside the EU (including in Serbia, Türkiye, and Morocco). Sébastien Frendo, CEO of the Paris-based consulting firm Duwell-Dugood, predicted, “It would not be surprising if two or three of Europe’s top 10 parts suppliers were Chinese-owned in the near future.”
Paradoxically, some observers point out that the EU’s push for regulations mandating the use of locally produced parts and labor (the “local content” regulations) is actually increasing the incentive for Chinese companies to invest in Europe. A senior executive at a major Japanese parts manufacturer said, “From the perspective of Chinese parts companies, acquiring European firms is an effective way to quickly secure ‘Made in EU’ status and production bases without having to build them from scratch.” Previously, in 2024, the EU investigated the impact of state subsidies and imposed additional tariffs on Chinese electric vehicles, such as those from BYD, on top of the existing 10% tariff.

The ripple effects across the industry are also significant. The European automotive parts industry directly employs approximately 1.7 million people, but according to CLEPA, the European parts industry association, major parts suppliers such as Bosch, Valeo, and Forvia have cut more than 100,000 jobs over the past two years. Benjamin Blander, a partner at Porsche Consulting, said that automakers are closely monitoring the supply chain risks that would arise if a single supplier of key components were to fall under Chinese ownership. In Italy, the government and shareholders are exploring ways to divest Chinese company Sinochem’s stake in tire manufacturer Pirelli, amid concerns that Sinochem’s ownership could block Pirelli’s access to the U.S. market.
However, not all cases lead to conflict. When Chinese electronics company Luxshare acquired Germany’s Leoni for 525 million euros last year, Leoni’s European clients—who were facing financial difficulties at the time—actually actively supported the deal. Leoni CEO Klaus Linnerberger told the FT that automakers wanted to learn from China’s rapid pace of development. Christoph Hartung, a member of the Bosch Mobility board, said, “We have long been deeply integrated into the Chinese ecosystem and are practically half a Chinese company,” adding that the company is seeking ways to coexist through collaboration rather than acquisitions.
Observers note that this trend offers insights for the South Korean industry, which competes directly with China in the battery and parts supply chains. The FT’s observation that only a handful of Chinese parts suppliers, such as CATL, possess global competitiveness suggests that South Korean companies—including LG Energy Solution(373220),SAMSUNG SDI CO.,LTD.(006400), and SK On—still hold a competitive edge in certain areas of the battery sector. The fact that European automakers’ local content strategies are actually accelerating the localization of Chinese parts suppliers could serve as a signal that the South Korean parts and battery industries also need to reevaluate their strategies regarding European production hubs.