Chinese automotive “blitzkrieg” in SE Europe – Bulgaria as entrance, Serbia as production base?

Chinese automotive companies are increasingly aggressively expanding their presence in Southeast Europe, according to an analysis by the Central European Institute of Asian Studies (CEIAS), which uses the example of Bulgaria to show how this strategy, which it compares to a “blitzkrieg,” works in practice.

In an interesting analysis from late last year, CEIAS states that Chinese companies in Bulgaria are investing in the production and supply of auto parts, while at the same time participating in public procurement of electric vehicles, which allows them to quickly capture market space and sometimes take over or replace existing companies in key segments.

According to CEIAS, the goal is clear: building regional automotive industrial ecosystems that include production, parts supply, marketing and vehicle sales.

Although some earlier projects, such as BYD and Great Wall Motor, failed, there are now plans to revive electric vehicle production in Lovech under the ORA brand, while companies such as ZS Europe (Shanghai Unison) and unnamed Chinese companies are investing in the production of auto parts and electrical transformers for the EU market.

On the market, Dongfeng has significantly increased its presence since 2021, opening 13 showrooms and offering 12 models, with aggressive marketing activities that include sponsorships of cultural and sporting events. Chinese brands currently hold around 3.2% of the market. Currently, three Chinese manufacturers sell their cars in Bulgaria, and this number is expected to reach seven soon.

Other manufacturers such as NIO, Geely, Chery and Leapmotor are also planning or already expanding their presence in the country, combining local sales and connections with existing European suppliers and mobility.

CEIAS points out that this approach by Chinese companies could have a long-term impact on production capacities in the region and potentially open up space for greater participation of Chinese companies in vehicle assembly and supply.

While Bulgaria is the focus, the analysis indicates that Serbia is also at the center of China’s long-term plans for the region. CEIAS states that “Dongfeng remains interested in increasing its stake in the Stellantis Group, which has a factory in Serbia.”

These allegations have not been confirmed by the companies in question so far. It is known that the Chinese state-owned company Dongfeng Motor Corporation previously had a stake in the Stellantis Group, but in November 2023, Stellantis bought back 50 million of its shares from Dongfeng. After that transaction, Dongfeng retained about 49.2 million shares, which makes up approximately 1.58% of Stellantis’s capital after the cancellation of shares.

Let us also remind that Serbia has been on the radar of Chinese investments in the automotive sector for some time - several companies from China have opened factories for the production of car parts, and last year the Chinese company GEB-Shandong Golden Empire Precision Machinery Technology expressed interest in building a plant in Serbia that would produce parts for BMW. Chinese manufacturer Chery Automobile also announced the possibility of opening a plant in Serbia, while their compatriot, JMEV, would like to assemble up to 5,000 electric cars per year in Sremska Mitrovica.

This list, which is by no means exhaustive, confirms that Serbia occupies a strategic position in the regional strategy of Chinese automotive companies.

B. P.

CEIAS

Central European Institute of Asian Studies

Chery Automobile

Dongfeng Motor Corporation

GEB Shandong Golden Empire Precision Machinery Technology

JMEV

Stellantis

Chinese automotive industry