China, Germany set to cooperate in auto industry
Since September, several major events in the automotive industry have been staged in China and Germany. It has become clear that the two countries will stride toward deeper cooperation in this field.
According to a Der Spiegel report on September 17, Chinese automakers exhibited new electric vehicles that use the latest smart technology at the Frankfurt International Motor Show (IAA) in Germany, further revealing the strong confidence that Chinese auto companies have about developing futuristic cars. Chinese cars will soon change the balance of the global automotive industry. At the same time, through the increasingly closer collaboration between Chinese and German car companies, aspects of “Made in China” are being integrated into a new round of “Made in Germany” automobiles.
German Chancellor Angela Merkel recently witnessed the signing of four cooperation projects in the automotive sector during her 12th visit to China. According to a Handelsblatt report on September 6, BMW Motor and the China Information and Communication Research Institute jointly signed a Memorandum of Understanding (MOU) on the cooperation of intelligent connected vehicles. The two sides will enhance information sharing, conduct joint research projects, and cooperate in autodriving data connections, wireless communication networks and industry 4.0, smart cities and information security.
Merkel also attended the opening ceremony of Webasto’s special new plant in Wuhan, Central China’s Hubei Province. The new plant will be the car equipment manufacturer’s largest production base, mainly in charge of automotive sunroofs, electric heaters and charging solutions. Schaeffler, the German auto parts giant, signed an investment agreement with the Hunan provincial government to establish a wholly-owned subsidiary in the Xiangjiang New District to introduce Space Drive wiresteering technology into the district. “German car companies are optimistic about the future of China’s auto market and look forward to furthering cooperation with China,” reported Frankfurter Allgemeine Zeitung, a German newspaper.
More than 30 years ago, Volkswagen and Shanghai Auto established the first car joint venture after China’s reform and opening-up, which opened the “joint venture era” between German and Chinese automakers. For these joint ventures, it is the German carmakers that enjoy a technological dominance while China offers a large market and technical personnel.
China’s auto industry has made enormous progress in recent years and has taken a leading position worldwide in the field of electric vehicles. China is also reputed as a toptier country in relevant areas including smart driving, the Internet of Vehicles, artificial intelligence, digitalization and 5G. At the same time, the German automotive industry still dominates globally with its brand advantages and technological heritage.
German auto companies have set up 30 production plants in China, which has become the most important market for the German auto industry – particularly relevant now that the German economy is on the verge of recession after an economic contraction in the second quarter of 2019. German manufacturing declined by nearly 5 percent, and exports suffered their most significant slump in six years. The promising Chinese market is thus becoming more vital to the German automotive industry. According to data from the German Automobile Manufacturers Association, the sales volume of Chinese domestic automakers has soared from 2 million in 2010 to 5.2 million in 2018, accounting for about one-fifth of total sales in the Chinese auto market.
As Chinese cars are going global, “German experience” is urgently needed. “New
cooperation” between China and Germany has become inevitable.
A German auto economy expert in Munich believes that Chinese and German automakers are taking the lead in the supply chain. In the future, the cooperation between German and Chinese auto companies will mainly focus on three aspects.
The first is the upgrading of cooperation between Chinese and German automakers. Second, German automakers will cooperate with Chinese technology companies as intelligent networks and autonomous driving are new, soughtafter areas in the automotive field. Third, Chinese and German companies will enter new markets hand in hand.