Gasgoo Weekly | Continental Sells ContiTech Division; Chery South Africa Plant Parts Localization Rate to Reach 40%

What were the biggest stories in the global auto industry this week?

EU Imposes Anti-Dumping Duties of Up to 45.3% on Chinese Tires

The European Union unveiled final measures on July 7. It decided to impose duties regarding its anti-dumping investigation into passenger car, bus, and light truck tires from China.

The probe stemmed from a complaint filed on April 7, 2025, by the "Coalition Against Unfair Tyre Imports." The investigation officially launched on May 20, 2025. It covered the period from January 1 to December 31, 2024.

EU findings revealed that during the review period, consumption of passenger and light commercial vehicle tires in the bloc reached roughly 336 million units. Exports from China surged by over 35 million to 93 million units. This boosted Chinese exporters' market share from 18% to 28%. Meanwhile, domestic European manufacturers saw their share slip from 60% to 53%.

The EU noted that the average import price for Chinese tires during the investigation was 30.3 euros per unit. This was significantly below the price of locally produced goods, representing a 19% gap. For economy tires (Type 3), the price gap peaked at 34.7%.

Under the final ruling, anti-dumping duties for different companies are as follows:

These measures take effect on July 8, though they will not apply retroactively.

Gasgoo Take: The tiered duties, ranging from 4.3% to 45.3%, place severe restrictions on low-price, high-volume players. Premium brands effectively receive a pass.

Hungary Plans Crackdown on Power Battery Pollution; Violators Risk Plant Closures

Hungarian Environment Minister Laszlo Gajdos stated that the government will shut down factories of power battery companies that violate environmental regulations. This stance marks a sharp policy pivot for the country's battery sector. It contrasts sharply with the heavy support provided by the administration of former Prime Minister Viktor Orbán, who left office in April.

Since 2021, the Orbán administration had bet heavily on the power battery industry. Government statistics show it attracted roughly 26 billion euros ($29.69 billion) in foreign investment. This was mainly from South Korean and Chinese firms. It established Hungary as a key European manufacturing hub for batteries.

Image Source: CATL

Among the players is China's CATL. Its 7.3 billion euro, 100 GWh battery plant in Debrecen is preparing for operation.

South Korea's Samsung SDI, for its part, is expanding its battery plant in Göd with government support. It aims to meet growing European demand.

Meanwhile, BYD is building its first European assembly plant in Szeged, Hungary. Scheduled for mass production in the fourth quarter of 2026, the company has confirmed it will establish localized battery production capabilities in Europe.

In a July 1 Facebook post, Gajdos wrote: "We must restore the balance between industrial development and environmental protection. Over the past 16 years, that balance has tipped entirely in favor of industry."

He also emphasized: "Companies that repeatedly violate regulations, endanger the health and safety of the Hungarian people, and ignore Hungarian laws should not continue to operate in Hungary."

Additionally, he pledged to raise fines for environmental pollution to the "strictest in Europe."

Gasgoo Take: The narrative of low-cost manufacturing in Eastern Europe is being rewritten by green politics.

Chery Officially Opens Rosslyn Plant in South Africa

Chery Automobile officially inaugurated its vehicle manufacturing plant in Rosslyn, South Africa, on July 3. Executives revealed plans to invest millions in equipment upgrades. They aim to start vehicle production by mid-2027. The company stated it intends to transform the South African facility into a core hub for manufacturing, exports, R&D, and regional operations across the continent.

Image Source: Chery

Initially, the plant will produce Chery's Jetour T series, including the Jetour T1, Jetour J5, and the Chery Tiggo 4 SUVs. The Jetour J5 will launch in both internal combustion and new energy versions. Zhang Guibing told media that Chery will invest millions in facility upgrades but did not disclose the exact amount.

The facility will enter capacity ramp-up in the third and fourth quarters of 2027, with an initial planned annual output of 15,000 units. Additionally, Chery has launched a plan to boost local sourcing, targeting an initial localization rate of 40% for parts. The company is currently surveying top-tier local suppliers and plans to bring in Chinese suppliers to focus on EV and smart vehicle components.

Gasgoo Take: Compared to the 15,000-unit capacity, achieving a 40% local parts rate is the real challenge.

Volkswagen Group Plans to Cut Capacity, Streamline Model Lineup

On July 9, following a supervisory board meeting, Volkswagen announced it would gradually cut up to half of its models. This aims to focus on the most promising segments. Annual production capacity will be reduced from the current 10 million units to 9 million.

"The global industry situation has continued to deteriorate over the past twelve months, so we must act immediately," said Volkswagen CEO Oliver Blume.

Image Source: Volkswagen Group

Insiders revealed that Oliver Blume is considering closing four German plants: Hanover, Emden, Zwickau, and the Audi Neckarsulm site. Layoffs could reach 100,000—roughly double previous estimates. This would mark the largest restructuring in the group's history.

Gasgoo Take: Slashing half the models and cutting 1 million units of capacity represents a significant restructuring for the large group.

Continental Sells ContiTech Division for 4 Billion Euros

German auto supplier Continental AG reached an agreement on July 4 to sell its industrial unit, ContiTech, to private equity firm Lone Star Funds. This completes a slimdown to focus entirely on its tire business.

Continental announced that Lone Star will acquire the ContiTech division, which produces industrial parts like conveyor belts and air springs. The unit has an overall valuation of 4 billion euros ($4.6 billion). The deal is expected to close by year-end, generating about 3.1 billion euros in cash, with an additional earn-out of up to 250 million euros.

Continental plans to use the proceeds to repay debt and return approximately 2.5 billion euros to shareholders through buybacks and special dividends. After assessing the balance sheet impact, the group will adjust its full-year guidance, though expectations for the tire business remain unchanged.

Gasgoo Take: Retreating from the "components + tires + industry" narrative back to "tires only." In a downturn, prioritizing cash flow comes before transformation.

Czech Billionaire Considers Buying 14% Stake in Pirelli

According to Bloomberg, Czech billionaire Michal Strnad is in talks with Sinochem Holdings, Pirelli's largest shareholder, to acquire part of its stake. A deal would help alleviate concerns about Chinese influence over the Italian tire maker.

Sources said Strnad is negotiating for a 14% stake and requested anonymity due to the confidential nature of the talks. Discussions are ongoing, and a final agreement is not certain. One potential hurdle is securing approval from Chinese authorities.

Based on current market capitalization, the transaction would be worth over 1 billion euros ($1.14 billion). Post-deal, Sinochem's stake in Pirelli would drop to around 20%.

Gasgoo Take: With Czech capital taking a 14% stake and Sinochem stepping back, Pirelli gains another layer of European legitimacy. This updates the brand story.

Honda Delays Plan to Acquire Astemo

Honda Motor announced it is postponing plans to turn automotive systems supplier Astemo Ltd into a subsidiary.

The Japanese automaker now expects to complete the acquisition of a controlling stake in Astemo by the end of 2026. This is a delay from the previously targeted end of the second quarter of 2026.

Image Source: Astemo

Currently, Honda holds a 40% stake in Astemo, as does Japanese conglomerate Hitachi Ltd, while JIC Capital owns the remaining 20%.

Under the agreement, Honda will purchase 21% of Astemo shares from Hitachi. This will increase Honda's stake to 61% and reduce Hitachi's to 19%, while JIC Capital retains 20%.

In a statement, Honda said: "Facing rapid changes in the auto industry, Honda must lead Astemo's transformation. We aim to build a structure capable of developing AI and software technologies quickly. This meets the demands of the software-defined vehicle era."

Honda revealed that since announcing the deal last December, it has been advancing the necessary approval processes. However, completion has been delayed as regulatory reviews have progressed slower than expected.

Gasgoo Take: Stuck in the slow lane of regulatory approvals, the window for software-defined vehicles will not wait. Time is more precious than equity.