Gasgoo Munich- For Chinese automakers, building plants in Europe has shifted from an "option" to a "necessity."
As export volumes surge, simply shipping cars to Europe is no longer enough to navigate the new market landscape. Whether to dodge trade barriers or truly integrate locally, establishing local production is viewed as a step Chinese automakers cannot bypass in their globalization push.
Yet, the real test begins only after the factories are grounded. Where to recruit, how to hire compliantly, and how to navigate relationships with local staff and unions—these questions have no ready-made answers. At the 2026 Global Chinese Automotive Elite Joint Annual Meeting and the "China Embracing the World" Automotive Industry International Development Forum, several guests with frontline experience in Europe discussed labor issues, revealing the other side of Chinese automakers' overseas expansion.
AI-generated image; Source: Doubao
Where will the workforce come from?
The first practical question when building a plant in Europe is simple: Where will the workers come from?
Hu Zhenwei, a partner at Intellipro Group, shared an observation: in regions like Spain and Hungary where it is easier for Chinese automakers to set up shop, young people tend to resent long-term factory shift work and prefer office roles. The Chinese practice of recruiting workers aged 20 to 28 is difficult to sustain; instead, companies are likely to find themselves hiring mostly middle-aged workers.
When local labor falls short, migrant workers become a crucial supplement. According to Hu, Eastern European laborers do not need extra work visas and share a common language, but they lack stability—a phenomenon described as "migratory work." North African laborers are largely hardworking, and many hold long-term status, though companies must verify legal work visas and be mindful of religious beliefs during management. While refugee labor comes with government subsidies, if their status is rejected, they can become illegal workers the next day; as a result, automakers and manufacturers rarely use this group.
He cautioned that companies must first clarify whether a local site is for manufacturing or sales and assess production capacity before matching talent. This requires foresight; companies cannot afford to take it one step at a time.
Beyond hiring ordinary workers, poaching technical backbone staff from established foreign automakers is equally complex.
Hu noted that Chinese companies are accustomed to poaching talent with salary hikes, often between 15% and 50%. While this approach may still work in Southeast Asia, it backfires in Europe. When local technical workers and managers see significantly higher wages, their first reaction is suspicion—they worry that high pay comes with excessive overtime and long hours. Instead, they prioritize overtime benefits, night-shift allowances, and supporting arrangements that exceed industry collective agreements.
Chen Weiwei, a council member of the Association of Chinese Mechanical and Electrical Engineers in Germany, also addressed the pace of talent development. "Europeans won't do '996' (9 am to 9 pm, six days a week), let alone '007' (0 to 0, seven days a week)," he said. Whether it is technical workers repairing Chinese EVs or after-sales service personnel, training takes time. Automakers should start strengthening this now, rather than waiting for problems to erupt before trying to fix them.
Wu Jian, AI Director at Shanghai Puchi Automotive Technology, highlighted a troubling trend. A Chinese company once announced a headquarters in Munich and recruited aggressively, prompting many professionals to resign and join. Yet, when the market underperformed, the company shut down and withdrew within a month. This approach left a negative impression locally, making it even harder for those who followed to gain trust.
Recruiting is only the first step. Once workers are inside the factory, companies must confront a comprehensive set of local labor rules—and the rigidity of these rules often exceeds the expectations of many Chinese firms.
Where are the red lines?
"Global auto sales have basically stabilized around 98 million units, with passenger vehicles at about 70 million. Annual growth is only a few tenths of a percentage point; the market is relatively saturated and has entered a stage of competition for existing market share. In this environment, companies can no longer rely on simple expansion—compliance has become an unavoidable hard constraint," said Yang Yaoyu, General Manager of ThunderSoft Europe's Automotive Business Division.
Hu Zhenwei cited the EU's General Data Protection Regulation (GDPR). The fine cap under these rules can reach 20 million euros or 4% of global revenue—whichever is higher. Even if a company has no branches or employees in Europe, as long as its suppliers or car buyers are there, the relevant data is protected. These rules are enforced strictly, regardless of company background or size; in 2023, an overseas tech giant was fined approximately 400 million euros.
He outlined three common pitfalls. First, if factory cameras capture employees to monitor attendance or performance, this must be disclosed in advance. Second, data protection impact assessments must be documented in writing; if risks persist, they must be reported to industry associations and labor authorities. Third, for pre-employment medicals, companies may only receive a doctor's conclusion on fitness for the role—they cannot demand the full medical report.
Whether employee data can be transferred back to China is also a nuanced issue. Hu cited a retail supermarket example: removing names but retaining employee numbers, shifts, and workstations still allows individuals to be reverse-engineered, which does not count as anonymization. True anonymization means the individual cannot be reverse-engineered through any data; only that standard allows data to be transferred back to China.
Yang Yaoyu mentioned a common practice among overseas firms. He noted that some American companies, to comply with European regulations, build servers and data centers locally, notify users before utilizing their data, and regularly scrub and permanently delete data. This is a path Chinese companies can reference.
Labor rules themselves offer no wiggle room. Hu Zhenwei detailed that Spain predominantly uses indefinite-term contracts, while Hungary caps fixed-term contracts at five years, after which they must convert to indefinite terms. Spain's nominal 30 days of annual leave refers to calendar days—roughly 22 working days. As for overtime, Hungary allows no more than 250 hours per year, while Spain permits only 80 hours. Spread over a month, that is about seven hours—barely distinguishable from no overtime at all.
Handling sick leave requires finesse. "If an employee is frequently absent, a supervisor cannot confront them or ask what they did," Hu explained. "The only recourse is to ask the local social security administration to review the case—to verify the authenticity of the illness and assess the employee's long-term capacity for work."
Visas for expatriate staff are another high-risk area. Hu drew a distinction between work visas and business visas: the latter cannot be used for actual work. Some companies send maintenance engineers on business visas, but if caught, the employee faces blacklisting and the company risks revenue-based penalties. He advised companies to stick to compliant paths and conduct risk assessments upfront.
The role of labor unions is also unavoidable. Zhang Shicheng, Chairman of the Association of Chinese Mechanical and Electrical Engineers in Germany, noted that German unions stand entirely on the side of employees and are protected by law; hiring requires union approval. His own department once needed to hire urgently, but because union approval was delayed, the position remained vacant for several months.
How to win hearts and minds?
Regulations can be managed with systems, but the real challenge lies in culture.
Hu Zhenwei believes cross-cultural synergy may be more important than labor law, yet it is also the most easily overlooked. He contrasted Spain and Hungary. Spaniards rarely refuse directly; a phrase like "I'll think about it" often means no, and they deeply resent being scolded publicly. Hungary's style is closer to Germany's: rigorous, conservative, and hierarchical. In meetings, a counterpart nodding in agreement does not necessarily signify true consent; discussions must be confirmed in writing afterward.
Zhang Shicheng pointed out that in German companies, calling employees after work is a cultural taboo. Car owners also value autonomy; frequent remote upgrades by the company can be seen as interference. A safer approach is to combine upgrades with maintenance visits, encouraging owners to come to the dealership—which actually makes the automaker appear more responsible.
Regarding working hours, several specific rules are worth noting. France's "right to disconnect" stipulates that companies cannot arrange work after hours or on weekends. Even if a response is not required, sending messages after 8 p.m. or on weekends creates pressure for employees and could trigger collective complaints.
Spain's extended summer holidays present another hurdle. Locals have a custom of vacationing by the sea in July and August, and companies cannot link vacation time to performance—that is illegal. Instead, equipment maintenance and technical upgrades can be scheduled for these months, coordinated 3 to 6 months in advance, with migrant labor used to supplement capacity. Daily scheduling must also ensure a statutory 12-hour break between shifts; these rules apply to Chinese expatriate staff as well.
During the discussion, Chang Jiang, General Manager of Powertrain Software Development and System Design at the Shanghai R&D Center of a foreign automaker, raised a more fundamental issue. He believes the biggest risk in building factories is identity. If a company's identity is not recognized by consumers, regulators, the local supply chain, and union employees, it will face cascading problems in sales, compliance, and labor relations. Companies must clearly answer: Are they a Chinese company selling cars in Europe, or a global company producing, researching, and creating value in Europe?
In his view, the path of "marriage" is also an option. He noted that Europe developed significant industrial capabilities for new energy, many of which were not successful, leaving some factories idle. While Chinese companies currently enjoy industrial dividends, they can leverage these capabilities through joint ventures and partnerships rather than building everything from scratch.
Chen Weiwei also issued a reminder regarding the win-win dynamic. He said that as Chinese cars sell more, the unemployed in the European auto industry—and their friends and family—are increasingly likely to view Chinese vehicles as a threat causing disruption. This sentiment cannot be changed by product alone; companies must use cooperation and local employment to show locals that they are growing the pie together, rather than unilaterally seizing market share.
Wu Jian believes cultivating a cultural identity is a long-term process. It is reflected in a company's attitude toward employees and society, as well as consistency between domestic and international operations—it is not something that can be achieved overnight.
In his address, Fu Yuwu, Honorary Chairman of the Society of Automotive Engineers of China and former Chairman of the Automotive Talent Professional Committee, elevated talent to a fundamental position. Citing an entrepreneur's experience, he noted that the most critical aspect of going global is cultural integration. Companies need engineers and managers with international vision and familiarity with local cultures; relying solely on a senior executive traveling abroad frequently is not enough to manage a global enterprise well.
Xu Haidong, Deputy Chief Engineer of the China Association of Automobile Manufacturers, holds a similar view. He believes the key to international talent is leadership—moving local employees through character and values rather than issuing orders. He also proposed a litmus test: If headquarters ceased to exist, could the overseas business continue to operate normally?
Taken together, these views point to a single reality. Selling cars in Europe is just the first step; whether Chinese automakers can make local employees feel secure and gain acceptance from unions and communities will determine how far they can go. The companies that ultimately remain in this market will be those that view themselves as part of the local fabric—not merely transient travelers.
