Chinese automakers committed to Europe despite EV tariff probe, industry group says

BEIJING (Reuters) -Chinese automakers' plans to invest in Europe won't be deflected by the EU's anti-subsidy probe into Chinese-made electric vehicles, a leading Chinese auto industry association said on Tuesday.

"Chinese enterprises will continue to unswervingly develop in Europe and integrate into local markets," said Cui Dongshu, secretary general of the China Passenger Car Association (CPCA)

He made the remarks while announcing a rare drop in Chinese car exports for May amid an ongoing slide in domestic sales.

The European Union alleges Chinese automakers benefit unfairly from state subsidies and accuses them of dumping excess production on Europe, charges that Beijing denies.

The EU is this week expected to announced the tariffs it plans to impose on Chinese electric vehicles in a move that could prompt retaliation.

"The traditional carmaking industry plays a big part in generating employment in Europe ... Chinese firms won't take aggressive measures or low-pricing moves to disrupt the stability of employment in Europe," Cui said.

Chinese exports of new energy vehicles (NEVs) - which include electric cars and plug-in hybrids - fell 4% year-on-year in May and were down 18.8% from the previous month, CPCA data showed. NEV exports as a percentage of overall car exports stood at 24.8%, a rare yearly fall of 6.8 percentage points.

Overall, passenger vehicle exports fell 9% from a record high in April to 378,000 vehicles in May, the data showed.

"Export growth didn’t meet our expectations," Cui said.

Domestic vehicle sales were down 2.2% following a 5.8% decline in April, in a sign weak demand is becoming entrenched in the world's biggest auto market amid a sputtering economy.

Sales of NEVs in China made up 46.7% of total car sales in May, a fresh monthly high. EV sales rose 27.4% after a 12.1% increase in April, while plug-in hybrid sales rose 61.1% versus a 64.2% jump the month before.

Stiff competition and the threat of EU tariffs, which China labels as protectionism, have done little so far to deter Chinese EV makers from ramping up production and exploring overseas markets.

Nio, the eighth biggest EV maker in China by sales, has won regulatory approval to build a third factory in China that would boost its total approved production capacity to 1 million cars, Reuters reported. The company also opened its first showroom in Amsterdam in May.

Sales of NEVs in China have been helped by government subsidies for trade-in schemes worth 11.2 billion yuan ($1.55 billion) this year, and contrast with a continued decline in demand for gasoline cars.

($1 = 7.2445 Chinese yuan renminbi)

(Reporting by Qiaoyi Li, Zhang Yan and Miyoung Kim; Editing by Rashmi Aich and Mark Potter)