Automakers focusing on the global market

SHANGHAI, China — Booths of big Chinese, German and Japanese automakers were bustling at Shanghai's auto show this week as the industry kept its focus on a wider global market not subject to steep US tariffs on imports of cars and auto parts.

Signs are that United States President Donald Trump's 25-percent tariffs on auto imports is causing companies to recalibrate their strategies, and in some cases find new opportunities.

"When governments up above are at odds, it's going to impact the businesses down below," said Ma Lihua, general manager at Soling, a Chinese maker of domain control units and other electronics used in such things as rearview camera displays.

Soling, headquartered in Shanghai, counts Ford Motor Co., Toyota Motor Corp. and many other top-tier global and Chinese automakers among its customers. It is also setting up a manufacturing base in Vietnam, whose local electric vehicle (EV) maker VinFast has ambitions to become Southeast Asia's leading automaker.

Many of the dozens of auto parts and components companies exhibiting at the Shanghai auto show have operations spanning both the Chinese and world markets.

Metal components maker Gestamp, a supplier of chassis, battery boxes and other key auto parts, has suffered from a slowdown in the US and western European markets but is expanding in Asia, Latin America and Eastern Europe.

The tariffs are now an added complication, as automakers watch to see what comes.

"In the past, supply chains usually would run like Swiss clockwork, but now it's the opposite," said Ernesto Barcelo, Gestamp chief ESG officer.

"The lack of stability now, it's something very... fluffy," Barcelo said.

A fundamental criterion for investing in any market is political stability, Wei Jianjun, chairman of Great Wall Motor Co., told reporters when asked about his company's plans to expand manufacturing overseas. That applies to countries like Hungary, where the company has not yet decided on whether to build a factory, he said, but also to the United States under Trump.

"If a country is not politically stable, it's very risky," said Wei.

With US tariffs so high, the Great Wall can focus elsewhere, such as on trade between China and Europe, which is bound to grow, he said. He didn't address the issue of the tariffs of up 45.3 percent that the EU has imposed on EVs made in China.

Tianshu Xin, CEO of Leapmotor International, a joint venture of Stellantis and China's Leapmotor, said the US market was not its first focus.

Now, "we want to monitor the regulatory environment and also customer preferences are slightly different compared with other markets," Xin said.

Japan's Nissan plans to launch 10 new EVs in China by 2027, nine of them its own brand, and to spend an extra $1.4 billion by the end of 2026 on its expansion there. In the US, it has the option to ramp up its spare capacity to make up for reduced imports due to the tariffs.

"Some doors have been shut, but others have been opened," Ma said. "But any plan you make you will change it very quickly. The market changes very quickly."

Apart from higher tariffs, automakers and suppliers also must contend with national security restrictions that are an increasingly important factor in auto electronics.

Some attending the show said they believe that ultimately Trump will end up softening his stance.

"Trump is a businessman, and he hopes to boost the US economy by imposing tariffs on other countries, but I do believe those measures are temporary," said Yang Jingdi, assistant to the CEO of LvXiang Automobile Parts Co.