Global automakers including Volkswagen and Toyota came to this year’s Beijing auto show looking to catch up to surging China EV makers that are dominating the world’s largest auto market.
The show that started this week showcased a marked shift in
attitude among some foreign automakers, industry executives said. After being
impressed by the bold leaps made by BYD and other Chinese automakers at last
year’s event in Shanghai, foreign automakers are now avidly searching for
Chinese partners and announcing new tie-ups, the executives said.
Among the most active were European and Japanese automakers,
with announcements coming from Toyota Motor that it would team up with Chinese
gaming and social media giant Tencent on artificial intelligence and big data,
and Volkswagen promoting its partnership with Chinese EV startup XPeng . An
executive from Renault said on Friday it had "pivotal conversations"
with Chinese EV maker Li Auto and Xiaomi, the smartphone maker that just
introduced its first car, to explore EV and smart-vehicle technologies. Nissan,
meanwhile, announced a tie-up with Chinese tech firm Baidu to carry out
research on AI and "smart cars." Nissan CEO Makoto Uchida visited
several booths including that of Chinese tech giant Huawei, which is becoming a
major auto supplier.
European automakers sent "much more senior
management" to visit the booth of LIDAR remote sensing technology supplier
Hesai Technology this year versus last year, said Bob in den Bosch, senior vice
president of global sales at the Shanghai-headquartered firm.
"They're looking for a partner to close the gap,"
he said. "They came here with a plan and a mission."
Foreign brands have dominated China's auto business since
the 1990s and have brought extensive know-how to the Asian country. But last
year, foreign brands' collective share of China's passenger car market fell to
48%, down sharply from 57% just two years earlier, according to data from the
China Association of Automobile Manufacturers.
GOING LOCAL German automakers including Volkswagen and
Mercedes, in particular, emphasized their efforts to localize production and
invest more in local partnerships, with Volkswagen saying repeatedly its goal
was to remain the best-selling foreign automaker in China into 2030.
Hildegard Mueller, president of Germany's powerful car lobby
VDA, told Reuters that the German automakers are, in addition, exploring new
marketing strategies to attract Chinese consumers. This includes partnering
with the country's army of car influencers, who promote and discuss new vehicle
models and trends with their large followings on social media.
"It's huge (online) traffic and huge potential,"
she said. The market share in China of Toyota, the world's top-selling
automaker, declined last year, according to data from the China Passenger Car
Association (CPCA). Toyota's China joint ventures with GAC and FAW held a
combined 7.9% of the Chinese auto market last year, compared with an 8.6% share
in 2022, the CPCA said. Toyota has said it will include technology from Tencent
in a China-made passenger vehicle the Japanese automaker will put on sale this
year as part of a new tie-up.
On Thursday, Toyota took care to emphasize the new tie-up,
with its chief technology officer, Hiroki Nakajima, inviting a senior Tencent
executive onstage to its auto show presentation.
"We want to, with Toyota, build products and services
that are closer to consumers, to jointly build mobility solutions of the future
and we look forward to the fruits of our cooperation," said Dowson Tong,
CEO of Tencent Cloud and Smart Industries Group.
Some foreign auto executives were more pessimistic about
their ability to fight back.
Katsuhide Moriyama, president of GAC Honda Automobile,
Honda's joint venture with Guangzhou Automobile Group , cited how China's
leading EV makers have found ways to slash vehicle development time.
"Manufacturers should shorten the lead time to compete
with those competitors," Moriyama said outside the automaker's booth at
the show. "But a two-year model cycle is too short for us."
The number of American car executives paled compared with
visitors from other foreign markets, noted Hesai's In den Bosch.
The market share in China of major American brands including
Ford and General Motors has plummeted amid declining gasoline-car sales and the
shift from foreign to Chinese brands.
Ford's chief financial officer, John Lawler, told reporters
in the United States on Wednesday that the automaker wants to maintain its
existing China presence but is not planning to invest more.
"We're not putting capital into China," he said.
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