Austria's stalled car sector seeks jumpstart from Chinese investment

Automotive companies across Europe are closing plants and laying off thousands amid weak demand and U.S. tariffs. Meanwhile, some are hoping China will be their anchor in the ongoing crisis.

"China is, next to Germany, the single most important market to us and it's increasing," says Markus Tomaschitz, spokesperson and head of HR at Austria's AVL.

For decades, the Graz-based company has produced components for global carmakers. But now AVL sees itself forced to lay off a record 350 workers at their Graz headquarters.

According to Austria's national employment service, the difficult situation in the Austrian automotive sector has caused almost 50 percent more people to lose their jobs in the first half of the year than in the same period last year.

There's hope however that trade with China could turn around those fortunes.

"There's more and more invested in innovation in the Chinese automotive market and therefore I don't see an end to this increase," Tomaschitz told CGTN.

Austrian expansion

The amount of AVL equipment being sent to China has steadily risen over the past years, now amounting to 15 percent of sales. And they're not alone: other machinery producers have seen increasing exports to the People's Republic.  

Even though Austria continues to be in a trade deficit with Beijing, exports to China rose by almost 10 percent last year, and that was due, in part, to a massive increase in machinery sales.

Meanwhile, Chinese automakers are expanding in Austria, betting on their competitive pricing and advanced technology to break into a market traditionally dominated by European and American brands.

In July, Steyr Automotive won an order to produce electric trucks for China's SuperPanther for sale in the European market. There are also reports that Austria's Magna is set to produce GAC cars.

"We will see a lot of Chinese innovations in the upcoming years especially in the new energy solutions," added Tomaschitz. "It's unique to see this variety and diversity of manufacturers in China trying to find different solutions. And we can be a really grateful partner for them."

In the future, AVL is eyeing to sell more of its hydrogen measuring devices on the Chinese market – devices needed in EVs for safety and to monitor fuel cell performance.

As a new-energy leader, China offers an extensive market – a market which Austrian companies are hoping to serve.