Foreign automakers eager for Chinese partners at Beijing auto show
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[April 27, 2024] By
Daniel Leussink and Sarah Wu
BEIJING (Reuters) - 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."
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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.
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People visit the booth of battery manufacturer CATL, at the Beijing
International Automotive Exhibition, or Auto China 2024, in Beijing,
China, April 25, 2024. REUTERS/Tingshu Wang/File Photo
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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.
PESSIMISM
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.
(Reporting by Daniel Leussink, Sarah Wu, Zhang Yan and Kevin
Krolicki in Beijing; Additional reporting by Ben Klayman in Detroit;
Editing by Brenda Goh, Brian Thevenot and Matthew Lewis)
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