EU/China row to hit carmakers

Europe's automobile industry has moved into the focus of Chinese counter-measures in the country's trade dispute with the European Union, French newspaper "Les Echo" reported Friday, citing unnamed sources within the EU.

The Chinese trade ministry was currently investigating major European carmakers on allegations that they were offering their cars below market prices, the newspaper wrote. The probe was focusing on luxury cars running on 2-liter engines and above, and would affect primarily the models of German top-of-the-range auto makers Mercedes, Porsche and BMW.

The alleged probe is likely to come in retaliation to punitive tariffs imposed by the European Commission on solar panel imports from China. The EU accuses China of undercutting market prices with the help of lavish state subsidies for solar manufacturers.

China considers the move unfair and has announced it would impose higher customs duties on unwelded steel pipes and European wine.

EU carmakers, notably those in Germany, were taking the threat very seriously, a spokesman for the European Automobile Manufacturers' Association (ACEA) told Reuters news agency on Friday.

The spokesman, whose name wasn't revealed by Reuters, said carmakers were expecting Beijing to retaliate unless the European Commission didn't change its trade policy towards China.

In a statement on Friday, German car industry lobby group, VDA, called on the Commission to resolve its problems with China by way of constructive dialogue, describing punitive tariffs as a blind alley.

In 2012, German carmakers exported a total of 285,000 vehicles worth about 12 billion euros ($15.8 billion) to China. However, most of the German cars sold in the Asian country are produced in China itself.

uhe/dr (AFP, Reuters)