(Yicai) May 31 -- Chinese carmaker Great Wall Motor will reportedly close its European headquarters in Munich, Germany.

Great Wall will shut the HQ on Aug. 31 and lay off all 100 employees working there because of tough market conditions and the threat of European Union tariffs on Chinese imports, Germany’s Manager Magazin reported on May 28.

The closure does not mean that Great Wall will withdraw from the European market, the report said, citing the company’s spokesperson for Europe. Great Wall’s vehicle manufacturing business in Europe will be managed remotely from its Chinese offices, the person added.

Baoding-based Great Wall will continue selling its cars in European markets, such as in Germany and the United Kingdom, the spokesperson also said.

The reason for the closure is the slowdown in the demand for electric vehicles in the region, especially in Germany, Chinese media Jiemian reported yesterday, citing a person familiar with the matter.

The EU’s anti-subsidy investigations into Chinese EVs are likely to result in new tariffs, bringing much uncertainty for Great Wall, Jiemian noted.

Svolt Energy Technology, Great Wall’s EV battery spin-off, said previously that due to the highly volatile European auto market and the postponement of a major customer’s project, it would scrap plans to build a plant in Brandenburg, Germany.

Great Wall’s Lighting Cat, battery electric sedan under its EV marque Ora, hit the German and UK markets on schedule. The carmaker’s other models are also on sale in Sweden, Ireland, Israel, and Bulgaria, with local resellers reporting directly to the firm’s headquarters in China.

Thousands of imported cars, mostly from China, are stuck at seaports in Europe, according to media reports last month.

The executive in charge of a Chinese automaker’s European business confirmed this to Yicai. Among the reasons for the slowdown in the digestion of Chinese car inventories in the region is declining local demand and the hike in exports by Chinese makers, the source added.

Editor: Futura Costaglione