EU Imposes Up to 45.3% Anti-Dumping Duties on Chinese Tires; Continental Sells ContiTech Business; Chery Targets 40% Localization at South Africa Plant

On July 7, the European Union announced its final ruling on the anti-dumping investigation into passenger car, bus, and light truck tires imported from China, deciding to impose definitive anti-dumping duties effective July 8. The duty rates range from 4.3% to 45.3%, varying by company. The investigation found that China’s tire exports to the EU surged to 93 million units in 2024, increasing its market share from 18% to 28%. The average import price stood at €30.3 per unit—19% lower than locally produced EU tires—with economy-grade tires showing a price gap as high as 34.7%. On July 4, Germany’s Continental AG announced it had reached an agreement to sell its ContiTech industrial business unit to Lone Star Funds for €4 billion. The unit specializes in industrial components such as conveyor belts and air springs. The transaction is expected to close by year-end, generating approximately €3.1 billion in cash for Continental, which plans to use part of the proceeds to repay debt and return about €2.5 billion to shareholders. Chery Automobile officially inaugurated its vehicle assembly plant in Rosslyn, South Africa, on July 3. Initially, the facility will produce three SUV models: the Jetour T1, Jetour J5 (available in both ICE and NEV variants), and the Tiggo 4. Production ramp-up is scheduled to begin in Q3 2027, with an initial annual capacity of 15,000 units. Chery aims to raise local parts sourcing to 40% and bring in Chinese suppliers to support localized production of EV and intelligent vehicle components. On July 1, Hungarian Minister for Environment László Gajdos stated that the government would take stringent measures—including factory closures—against traction battery manufacturers violating environmental regulations and would raise environmental fines to the strictest levels in Europe. This marks a shift in Hungary’s policy toward its battery industry. Contemporary Amperex Technology Co. Limited (CATL), Samsung SDI, and BYD all currently have battery or vehicle projects underway in Hungary. On July 9, Volkswagen Group announced plans to cut up to half of its vehicle models, reducing annual production capacity from 10 million to 9 million units. The automaker is also considering closing four plants in Germany and could lay off up to 100,000 employees—the largest restructuring in the company’s history. Czech billionaire Michal Strnad is in talks with Sinochem Holdings to acquire its 14% stake in Italian tire maker Pirelli for over €1 billion. If completed, Sinochem’s ownership would drop to around 20%. The deal still requires approval from Chinese authorities and remains under negotiation. Honda Motor Co. announced it is delaying the completion of its acquisition of a controlling stake in automotive parts supplier Astemo. Originally slated for the end of Q2 2026, the transaction is now expected to close by the end of 2026. Honda currently holds a 40% stake in Astemo and plans to acquire an additional 21% from Hitachi to gain control, but regulatory approvals are progressing slower than anticipated.