China Daily (Hong Kong)

Major automakers focus R&D efforts, investment in China

- HAO YAN

Internatio­nal carmakers are investing heavily to localize their research and developmen­t operations in China, the world’s largest automobile market.

BMW ’s Chinese venture, BMW Brilliance Automotive Ltd, expanded its R&D center earlier this month in Shenyang, capital of northeaste­rn Liaoning province. T he facility is now BMW G r o u p ’s largest outside Europe.

The new center, spanning more than 40,000 square meters, is five times that of the first phase of developmen­t, put into use in 2013.

“The new R&D center is a testimony to BMW Brilliance’s commitment of ‘In China, for China’. Innovation is the critical foundation of our corporate strategy, and the center is the connec tion be tween innovation and the applicatio­n,” said Johann Wieland, president and CEO of BMW Brilliance Automotive.

BMW Group’s sales in China, including BMW and Mini branded vehicles’ deliveries, were up 18.4 percent in the first half-year.

This strong increase is largely due to full availabili­ty of the BMW X1 and the popularity of the new BMW 1 Series sedan, a car designed exclusivel­y for China, accordi n g t o t h e g r o u p ’s n e w s release.

Jo h n S h e n , A c c e n t u r e Strategy Greater China managing director, said: “Internatio­nal automakers have to expand their local R&D capabiliti­es to accelerate their product developmen­t, while boosting the correlatio­ns with the local demands.”

“Considerin­g the world’s l a r g e s t m a r ke t ’s s c a l e , t h e internatio­nal carmakers are focusing more on China, so they are empowering the companies in the countr y,” he added.

Ya l e Z h a n g , m a n a g i n g director of Automotive Foresight (Shanghai), noted that BMW is among the progressiv­e internatio­nal automakers in expanding the R&D capabiliti­es in the Chinese auto market, together with Volvo Car Group and Volkswagen AG.

Volvo Car Group is to set up a new joint venture with Geely Holding to share existing and future automobile t e c h n o l o g y, a c c o r d i n g t o a memorandum of understand­ing the two par ties signed on Thursday.

The 50 -50 joint venture will be headquarte­red in China with a subsidiar y in Gothenburg, Sweden.

The partnershi­p will e n a b l e Vo l v o C a r G r o u p , Geely Auto and Lynk & Co — all of which are controlled by Geely Holding — to share technologi­es via license agreements.

Whichever company leads the developmen­t will own the technology and the other group companies will have full access to it through a license, reducing overall developmen­t costs.

Local media reports said Vo l k s w a g e n A G , w h i c h entered into a joint venture with JAC Motors called JAC Volkswagen, also has a plan to build a new R&D center for new energy vehicles with a total investment of 6 billion yuan.

Shen added: “The digital evolution is reshaping consumer demands and competitio­ns, and the situation in China is ahead of that in the United States and Europe. As a result, the R&D centers in China are necessary given the expectatio­n it will grow to one of the leading powers in autonomous driving, mobility, digitaliza­tion, and so on.”

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