Chinese automaker Great Wall Motor (GWM) said it planned to close its main European headquarters, in the Munich, Germany in August in response to sluggish sales in the region.

The Hong Kong listed automaker said it would lay off around 100 staff employed at the site, which was opened just three years ago, due to sluggish demand.

The company sold just 6,300 vehicles in Europe last year, equivalent to just 2% of its overseas sales and a small fraction of its 1.23m global sales.

The decision to close the headquarters came just days ahead of an expected announcement by the European Union to impose tariffs on Chinese made electric vehicles to protect the region’s automakers from imports which it claims benefit unfairly from Chinese government subsidies.

GWM was also understood to have shelved plans to establish local production and R&D operations which it had announced when it first opened its Munich base.

The company said it was “adjusting its European strategy as the region’s electric vehicle (EV) market becomes more challenging”.

According to local reports, GWM did not intend to exit Europe but it was scaling down its operations to bring them more in line with its sales volume.

Sales and aftersales operations in Europe in future would be managed from its global headquarters in China’s Hebei province.