Chinese, German firms pursue mutual benefit

VW, BMW and Daimler plan electric future in PRC as Nio and Great Wall set down in Europe

Automotive companies in China and Germany are stepping up efforts to explore each other's markets as the automotive industry speeds into the era of electrification.

Last week, Volkswagen AG CEO Herbert Diess called for more cooperation with China, saying it will not keep pace with innovation if it does not face the competition in the world's largest vehicle market.

"We need more cooperation and presence in China, not less," said Diess. "It would be very damaging if Germany or the EU wanted to decouple from China," he said.

China is Volkswagen's biggest market worldwide and also the world's largest market for new energy vehicles.

Sales of electric cars and plug-in hybrids totaled 2.99 million in the first 11 months of the year. Another 400,000 are expected to be sold in December, according to the China Association of Automobile Manufacturers. The association said those sales would rise to 5 million in 2022.

Diess said Volkswagen has significantly raised its NEV sales target in China in 2022. It has launched the electric ID. 3, ID. 4 and ID. 6 models in the country and is planning to introduce more.

Volkswagen unveiled in July a campaign called New Auto which focuses on electrification, autonomous driving and software-driven mobility.

"We have to use the Chinese speed and local technology platforms to remain globally relevant in New Auto," said Diess.

Just one week before Diess' remarks, German premium carmaker BMW released a new "China First" strategy to grow its market share in the country.

The carmaker said the strategy will enable it to respond quickly to market changes, especially taking into account Chinese customers' expectations at an early phase of vehicle development.

Among other things, BMW will open three plants in China in 2022, and it will produce the electric 3 Series sedan in the country, said Nicolas Peter, a BMW board member responsible for finance and China affairs.

In total, the company will offer five electric vehicles in China in 2022 and that figure will rise to around 13 by the end of 2023.

"BMW's success in internal combustion engines has fully displayed this (China First) thinking, and the BMW Group will continue to deepen its 'China First' approach in electrification," it said in a statement.

Other carmakers, including Mercedes-Benz parent Daimler, are accelerating efforts to grow their share in China's new energy vehicle market.

Daimler is producing and selling three Mercedes-Benz-branded electric vehicles in China, and another one is to be added in 2022. It also sells an imported electric model in the country.

The German carmaker said it will only sell electric vehicles "where market conditions allow" from 2030.

"There is no doubt in my mind that China will play an important role in the future of our industry," said Hubertus Troska, a board member of Daimler and Mercedes-Benz responsible for operations in China.

Chinese companies are accelerating their foray into Europe, with Germany as one of the most important markets, with electrified vehicles.

The International Motor Show Germany, held in September in Munich, attracted Great Wall Motors, Huawei, Xpeng and Leapmotor to showcase their products and solutions.

In Germany, 70 percent of respondents said they would like to change mobility behavior to cut their carbon footprint, according to the Digital Auto Report 2021 by consultancy firm Strategy&.

Chinese carmakers are ahead of European giants in offering such products. They are doing a far better job when it comes to smart operating systems for vehicles, industry experts said.

New York-listed electric car startup Nio announced in December that it will make inroads into Germany, the Netherlands, Sweden and Denmark in 2022.

Nio started its global expansion in September with Norway as the first stop. It launched its flagship ES8 in the country, with its ET7 sedan to follow in 2022.

Great Wall Motors has opened a European headquarters in Munich, which will serve as the base for China's largest SUV and pickup maker to reach more markets on the continent.

Its premium brand Wey is to launch its flagship European model, which is a plug-in hybrid SUV, in early 2022. It is scheduled to open its first European experience center in Munich in 2022 and more than 60 service stations are to be set up that year.

Great Wall Motors' electric marque Ora announced its European campaign as well, with the first model to be delivered in 2022.

The marque said it will offer five models within two years for European customers, and more than 10 models will be available on the continent in 10 years' time.

Other major Chinese carmakers－including SAIC, BYD as well as electric car startups such as Aiways and Xpeng－have been exploring the European market.

China's battery makers including CATL and Svolt are building plants in Germany to supply carmakers there.

"Only when Chinese auto companies enter the markets of developed countries can they truly participate in international competition," said Cui Dongshu, secretary-general of the China Passenger Car Association.