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China's Chery Auto: EU factory will help mitigate EV tariffs

FILE PHOTO: Chery cars are on display for sale in Vladivostok

LONDON (Reuters) -Chery Auto, China's largest automaker by export volume, expects its planned production in Europe to help offset the impact of European Union tariffs on imports of China-made electric vehicles, a senior executive said on Thursday.

Having local production "should help us mitigate some of the impact" of duties, Charlie Zhang, vice president of Chery Auto and president of its European business, told media a day after the EU said it would impose additional tariffs of up to 38.1% tariffs on Chinese EV imports.

Under the EU's proposal, Chery's imports will incur tariffs of 21%.

In the briefing, Zhang said the company expected to start EV production at its recently-acquired Barcelona factory in Spain - its first manufacturing site in Europe - by the end of the year.

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Chery and its rivals BYD and Great Wall Motor are looking to set up manufacturing and assembly plants in Europe as they aim to ramp up sales of lower-cost cars in the region to rival their European competitors amid slowing demand at home.

The Barcelona site will not be big enough to meet Chery's medium- and long-term plans for Europe, Zhang said, adding the company was looking at options for a second site. He declined to give details.

Zhang said Chery, one of several Chinese carmakers seeking a bigger footprint in Europe, was very "determined" to move ahead with its expansion plans there despite the tariffs.

The company said in March it would start selling Omoda and Jaecoo brand cars in Italy in the third quarter, making it the Chinese group's second European market.

(Reporting by Nick Carey and Josephine Mason; Editing by Jason Neely and Mark Potter)