China production an 'asset' for its newest electric car in Australia, says European brand
11/14/2024 06:00 PM
VW’s Spanish off-shoot says stigmas around where cars are built are “outdated”, and that Chinese production for its new car shortens shipping times.
The boss of one of Australia’s newest European brands has called old-school stigmas based on where cars are built “outdated”, and says producing its first electric SUV in China has fast-tracked it to local showrooms.
Cupra – a Spanish arm of the VW Group – will become the latest non-Chinese car brand to produce a vehicle for Australia in what is now the world’s largest car market, joining the likes of BMW and Kia.
The Cupra Tavascan is due in local showrooms early next year from a VW Group factory in China that will produce it for all global markets, rather than Germany or Spain like the brand’s other existing models.
MORE: German car makers are struggling in China as the nation favours its own
Cupra Australia director Ben Wilks told Drive Chinese production will cut shipping times for Australia, and that the brand’s customers are not concerned where their cars are built.
“I don’t think that’s something that’s been raised for us. I think, quite possibly, a lot of that thinking is outdated now,” he said, when asked if he has noticed any stigma towards producing the Tavascan in China.
“Products are coming to Australia from everywhere. So is a [Thai-built] Ford Ranger no more Australian than it is Thai, for example? Is a [South African-built VW] Amarok from South Africa, or is it from Germany? I think all of these things.
“The fundamentals of the engineering and the design of the car are relevant, and we have to find [production] capacity where we find capacity.
“In our case, that access to China is going to be an asset in terms of getting the car here on boats quickly from a logistics perspective, for example. So we’ll probably be able to meet the customer’s needs a bit more easily.”
He said he expects the Tavascan will be produced as well as a Cupra from Germany or Spain, and that if buyers with negative perceptions, it should “change them”.
“As with most things that we do, the proof will be in our showroom,” Wilks said.
“And I think that the quality standards of the cars we produce are universal, whether we’re producing it in our factory in Germany, for example, for the Born, in our factory in Barcelona for Formentor or Leon, or from Anhui, which is an incredibly advanced factory in China.
“So we’re very confident with the quality position of the Tavascan. I think that will be not an issue for people and would probably, if they do have any of the perceptions you’ve described, it should change them.”
The Tavascan will be the second Volkswagen Group model manufactured in China for Australia, following a small number of VW Polo sedans sold in the mid-2000s – which were, in fact, the first Chinese-made cars sold locally.
While Chinese production will help the Tavascan in Australia, it is set to have the opposite effect in Europe, where hefty tariffs on Chinese-made electric vehicles have been announced.
MORE: Overseas tariffs on Chinese electric cars 'only temporary' – BYD
Cupra global CEO Wayne Griffiths has warned the company could be “wiped out”, as the brand does not want to increase the Tavascan’s price to cover the 21.3 per cent tariff – so it would need to come out of the brand’s bottom line.
A reduction in Tavascan sales would see Cupra miss European CO2 emissions targets in 2025, and in turn face heavy fines, the executive reportedly told news agency Reuters.
“It puts the whole financial future of the company at risk. The intention [of the tariffs] was to protect the European car industry but for us, it’s having the opposite effect,” he is quoted as saying.
MORE: Chinese brands don't need tariffs – but should not be underestimated, says Toyota boss
“We’re not a Chinese brand trying to swamp the European market. Our cars are not for the masses. The car is not a subsidised product. We’re a different animal. That’s what we’re trying to explain.”
Griffiths reportedly said the Chinese-built Tavascan was always planned to be a “one-off” to get it to market quickly, and that the company has long intended for the next-generation model to be built in Europe.
Prices for the Tavascan are yet to be finalised in Australia, but it is planned to start from less than $70,000 before on-road costs locally – undercutting a Tesla Model Y Long Range.
Wilks said the Tavascan would have a “good role to play” in the Australian Cupra line-up, but it may not be the company’s top seller.
“If you see what’s coming in 2025, of course we have the Terramar [mid-size petrol SUV], we have the Formentor [small to mid-size coupe-styled petrol SUV] – that’s been the volume player for us in Cupra so far.
“And the Tavascan is really the third pillar there. So we have a large SUV – large for us – the [crossover] CUV in Formentor, and … a dedicated battery SUV.
“Between those three cars, I think they’re the main build-up of the volume.”
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