GWM Shutters Munich Office, Cancels European Expansion Plans

GWM (Great Wall Motor) is shuttering its European headquarters in Munich, Germany. The firm is also shelving its expansion plans for Europe.

Great Wall Motors, better known by its GWM brand acronym, recently announced that it will shutter its European headquarters in Munich, Germany. Announced earlier this week, said closure will take effect on 31 Aug, and all employees including management personnel from which will be laid off. 

The reason for this closure is believed to have stemmed from the brand’s overall slowed sales in the European Union (EU) markets, along with the looming threat of tariffs, which has since been delayed - look out for our report of which shortly. 

Moreover, the European EV market, especially in Germany, has seen a slowdown, compounded by heavy discounting from competitors, all of which have made the market particularly challenging for GWM. 

Additionally, the EU's investigation into Chinese EV subsidies and the possibility of punitive tariffs on Chinese car imports have created significant uncertainties for GWM’s European operations. Just 6,300 of the 316,018 units that GWM shifted overseas throughout 2023 stemmed from the EU.

Slowed sales, looming threats of tariffs, as well as reports of a "toxic" work environment, are believed to be leading factors driving GWM's decision to scale back its European operations.

In light of its decision, GWM released a statement acknowledging the necessity for modifications in the face of market volatility while reaffirming its commitment to the current European markets despite the negative news.

Current European markets will continue to see the sale of GWM models, though earlier ambitions to expand into other nations have now been shelved, reports credible sources.

As for its soon to be released employees, this does not seem like such bad news due to reports that have surfaced detailing a "toxic" work environment within GWM’s European organisation.  In fact, current and former employees reportedly cited issues such as a harsh company tone, lack of respect for their expertise, and "permanent domination" from China.

Steffen Cost, head of GWM’s European business and a former Kia manager, acknowledged that the working environment is intense, noting that "not everyone can cope with it."

Of the 316,018 vehicles that GWM shifted overseas throughout 2023, just 6,300 of which were charted by its European operations.

GWM first established its Munich headquarters in 2021 with roles encompassing R&D, sales, and management, aiming to expand to 300 employees by 2022.  One of its key objectives here was to collaborate with GWM’s subsidiary battery company, Svolt Energy Technology. 

However, Svolt recently canceled plans for a battery plant in Brandenburg, Germany, due to the "highly volatile automotive market" and delays in a major customer project.  Nevertheless, Svolt’s second plant in Überherrn, Germany, is still planned, albeit delayed by planning regulations.

GWM’s other European markets include Sweden, Ireland, the Baltic countries, and Bulgaria. Moving forward, local distributors, directed by GWM in China, will manage these markets. KR