The cooperation between China and Germany in the automotive industry continues to deepen

At the recently held "New Manufacturing World" conference in Bergen, Baden-W ü rttemberg, Germany, many attendees expressed that facing the headwinds of trade protectionism and economic globalization, the green transformation of Germany's automotive industry urgently requires international cooperation, and China is an indispensable and important partner.

The automotive industry is a highlight and benchmark of Sino German economic and trade cooperation. For many years, China and Germany have continuously deepened investment and trade cooperation in the automotive industry, and increased cooperation in the field of new energy vehicles, jointly promoting the green and low-carbon transformation of the automotive industry. The bi-directional development of China and Germany's automotive industry not only aligns with the common interests of both countries, but also injects vitality into the global automotive industry transformation.

Investment and trade are becoming increasingly close

The industrial and supply chains of China and Germany are deeply intertwined, and the markets of the two countries are highly dependent. In the automotive industry, there is enormous potential for win-win cooperation between the two countries. According to Hildegard Muller, President of the German Association of Automobile Manufacturers, German automobile manufacturing companies sold over 3.7 million cars in China in 2023. According to data released by ZF, a large German automotive parts supplier, in 2023, ZF's sales in the Chinese market reached 8.1 billion euros, a year-on-year increase of 5.2%. Stephen von Schuckman, a director of ZF Group, stated that by 2030, the proportion of sales in the Asia Pacific region, with the Chinese market as the mainstay, will increase from 25% to 30% in the global market. ZF is "very confident" in the Chinese market and cooperation between the two parties.

At the end of April this year, BMW Group in Germany announced an additional investment of 20 billion yuan in BMW's Shenyang production base. This investment is mainly used for the large-scale upgrade and technological innovation of BMW's Da Dong factory, laying the foundation for the localization production of its "new generation" models in China in 2026. BMW Group's global chairman, Qi Puce, stated that this investment plan further highlights the important position of the Chinese market in BMW Group's future towards intelligent connected vehicles. It not only confirms BMW's success in the Chinese market over the past 30 years, but also demonstrates BMW's firm trust in its development in China.

Since its establishment in 2014, the China Office of the German Association of Automobile Manufacturers has actively established industry exchange platforms, such as the R&D roundtable for vehicle members, the CEO roundtable for component members, the Sino German Forum on Automotive Industry Cooperation and Development, and the Sino German Automotive Industry Summit, to promote in-depth cooperation between the two sides in emerging fields such as automotive electrification, intelligence, and networking.

Marcus Borisi, Managing Director of the German Association of Automobile Manufacturers, recently stated at the 2024 China Europe Automotive Industry Development Forum that Volkswagen entered China more than 40 years ago and was one of the earliest foreign car companies to establish an automotive joint venture in China. For over 40 years, German automotive companies have witnessed and participated in the rapid development of China's automotive industry. Nowadays, China has become the world's largest automotive market, showing strong development momentum in the field of new energy vehicles, especially electric vehicles. The German Chinese automotive industry complements each other's advantages and has broad common interests and cooperation space.

R&D cooperation continues to expand

In recent years, German car companies have increased their technological research and development efforts in the Chinese market. In April this year, Mercedes Benz AG announced the upgrade of its Shanghai R&D center and the official opening of a new building, further accelerating digital innovation in China. It is reported that the new office area will consist of innovation space, laboratory, testing workshop and other areas, which can be used for efficient software and hardware development and full environment simulation.

Tang Shikai, a member of the board of directors of Mercedes Benz AG, stated that as a multinational enterprise, Mercedes Benz needs to place its research and development resources in the most suitable place. In the era of intelligent electric vehicles, China, where software and digital technology are flourishing, is the "most suitable place". "We have a dedicated team responsible for collecting demands from around the world, which will be synchronized and sent to the Chinese R&D team so that they can timely grasp the demands of other global markets."

In April this year, ZF Group's largest safety airbag production base project in the Asia Pacific region was put into operation in Wuhan, and the Wuhan R&D center was also put into operation simultaneously. The first R&D center of ZF in South China, the ZF Guangzhou Technology Center, was officially put into use in August 2023. Ke Haozhe, CEO of ZF Group, said, "China is one of the main positions of the global automotive industry reform. In recent years, ZF has launched a number of product technologies in China. Our local innovation in China serves both China and the world. We should make the technologies developed in China apply to the world."

Volkswagen Group and Xiaopeng Motors recently announced that they will collaborate to develop an electronic and electrical architecture based on regional control and quasi central computing, laying the foundation for innovative electric vehicle models. Chairman and CEO of Volkswagen Group (China), Baird, stated that by expanding cooperation with Xiaopeng Motors, Volkswagen will further integrate into the Chinese automotive industry ecosystem and better meet the needs of Chinese customers. Xiaopeng Motors Chairman and CEO He Xiaopeng said, "Strengthening cooperation in innovative technology research and development will make both sides more competitive in terms of technology and cost for smart electric vehicle products."

Bernd Mlekush, Executive Vice President of R&D at Audi Group, stated that the Chinese market is crucial and provides an inexhaustible driving force for Audi Group's continuous technological innovation. Audi Group is willing to further consolidate and deepen its cooperative relationship, and continuously empower Audi Group's electrification transformation and local research and development capabilities.

Jointly promoting green transformation of industries

"Upon learning of the opening of a BYD store in Berlin, we immediately came to test drive and purchase this well-known BYD ATTO 3, which has a good appearance and comfort," Rolf and his wife from Berlin told reporters recently. In August 2022, BYD officially entered the German market. In February 2024, German car retailer "Qunstar Motors" opened a BYD store in Berlin and showcased five models including the ATTO 3 that BYD currently sells in Germany, which have been favored by many consumers.

According to statistics, the fastest growing pure electric vehicle market in Germany in 2023 is Chinese brands. Among them, SAIC Roewe entered the top 10 in sales of electric vehicles in Germany, while Great Wall and BYD entered the top 25 in sales. NIO officially entered the German market in November 2022, opened the Berlin Innovation Center in 2023, and in April of this year, opened the Intelligent Driving Technology Center in Schneifeld, Greater Berlin. NIO's global design center located in Munich has 123 designers from 26 countries, mainly responsible for the design of NIO's entire product line and brand.

Chinese new energy technology companies have also successively settled in Germany, promoting both sides to work hand in hand on the path of green transformation. The first large-scale production factory for electric vehicle batteries in Germany was built by Chinese company CATL in Arnstadt, Thuringia. The factory was officially put into operation on January 26, 2023. According to Centgraf, the President of CATL Europe, the factory will provide battery cells for car manufacturers such as BMW, Daimler, and Bosch. It is expected that the annual production of battery cells after full production will reach 30 million, and can assemble 185000 to 350000 electric vehicles.

In September 2023, the first battery production line of China's new energy vehicle power battery manufacturer, Guoxuan High Tech's German factory, was officially put into operation. Peter Williamson, Chief Operating Officer of Guoxuan International and General Manager of Guoxuan Germany, stated that cooperation between Germany and China in the field of electric vehicle power batteries is crucial for the green transformation of the automotive industry in Germany and Europe.

Chinese power battery company Honeycomb Energy's cell factory located in the Lauchhammer area of Brandenburg, Germany is expected to start production in 2025. The Governor of Brandenburg, Dietmar Woydek, stated that investments from Honeycomb Energy will drive the optimization and development of the electric vehicle industry structure in the Brandenburg region, and assist in the electrification transformation of automotive energy.

Ferdinand Dudenhofer, a German authoritative expert in automotive economics and director of the Bochum Automotive Research Institute, recently stated that China is not only the world's largest automotive market, but also ranks among the top in areas such as battery technology, autonomous driving, and in car entertainment technology. Germany needs to cooperate with China to promote technological innovation. German Chinese automotive companies are very much looking forward to strengthening cooperation. "If we can work together and move forward side by side, the future of the automotive industry will be very beautiful.".