Chinese automotive parts companies have quietly expanded their control over Europe’s car supply chain through a sustained campaign of acquisitions targeting local suppliers, according to an investigation by the Financial Times published on Monday. The findings reveal more than 130 investments in European parts makers since the mid-2000s, concentrated in Germany and France, raising alarm among policymakers grappling with China’s growing industrial presence on the continent.
A Strategy of Small Deals
The acquisitions, tracked by consultancy Rhodium, have largely remained below the political radar. Many transactions over the past decade were worth less than €100 million, keeping them beneath thresholds that could trigger intervention by European regulators. Beijing’s “go global” strategy first encouraged Chinese firms to internationalize their operations, with investment peaking in the mid-2010s — exemplified by Geely’s $1.8 billion acquisition of Volvo Cars.
The true extent of Chinese ownership may be greater than publicly recognized. Corporate intelligence firm Sayari found that of the Chinese-controlled automotive assets it mapped in Germany, “roughly four in five are held through at least one offshore intermediary or involve a German-registered holding company carrying a local name,” according to CEO Farley Mesko.
EU Rules Create New Incentives
Brussels’ plans to impose stricter local-content requirements have added fresh impetus for Chinese companies to acquire European suppliers rather than build from scratch. The EU’s Industrial Acceleration Act, drafted earlier this year, consolidates local manufacturing requirements that effectively reward companies with existing European production bases. A senior executive at a leading Japanese parts supplier told the Financial Times that buying European companies offered Chinese suppliers a way to rapidly obtain “made in EU” status.
The strategy has grown more urgent since the EU imposed additional duties on Chinese EV manufacturers including BYD in 2024. One EU official described China’s challenge to Europe’s car sector as “the challenge of the decade for Europe”.
European Industry Caught Between Concern and Cooperation
Europe’s automotive parts sector directly employs about 1.7 million people, and major suppliers including Bosch, Valeo, and Forvia have already cut more than 100,000 jobs over the past two years. Financial difficulties among European manufacturers have created openings for Chinese buyers.
When electronics group Luxshare agreed last year to buy Germany’s Leoni for €525 million, the transaction received “active support” from Leoni’s European clients, who wanted access to China’s rapid development cycles.
Leoni chief executive Klaus Rinnerberger offered a blunt assessment of the competitive pressure: “What I firmly believe is that many suppliers will increasingly run into difficulties, because if you are not willing to work with the Chinese instead of against them, you will not be able to keep up with the pace of change that is coming”.
