German Media: The German Automotive Industry Must Learn from China

The Cologne City Newspaper published a commentary stating that the era when German automakers dominated the Chinese market has become history: At the Beijing International Auto Show, executives from German car companies could only marvel at the innovation capabilities of Chinese automakers like eager students.

In a prominent editorial, the Cologne City Newspaper wrote that the passive position of German automakers has been laid bare at this year’s international auto show in Beijing: Once dominant in China, German car manufacturers are now far behind their Chinese counterparts in both technology and price competition. The editorial titled "The Chinese Dilemma for German Automakers" stated:

"This is an unprecedented industry event: Numerous automotive companies launched over a thousand new models in Beijing, with approximately 180 making their global debut. The atmosphere was further enhanced by dazzling performances: flying taxis zipped through the skies, humanoid robots danced gracefully, and influencers with giant selfie sticks were everywhere. But what left the deepest impression were undoubtedly the remarkable technological innovations and highly attractive pricing offered by Chinese automakers. BYD, currently the leader in the electric vehicle market, unveiled a new model capable of charging fully within fifteen minutes even in sub-zero temperatures down to -30°C. XPeng’s latest SUV features an in-car refrigerator and offers full autonomous driving capability. However, one cannot ignore the harsh reality of the market: even the most successful Chinese automakers struggle to achieve profitability in their home market. Thanks to China’s industrial policies, a brutal price war has already erupted across the Chinese automotive market."

As a response, Chinese automakers such as BYD, NIO, and Geely have increased their exports to Southeast Asia, Latin America, and Russia. Yet, no market holds greater appeal for Chinese automakers than Europe, with its strong purchasing power. However, the European Commission has clearly signaled it will take protective measures to prevent European industries from being overwhelmed by a flood of cheap Chinese imports. The eventual compromise may be that if Chinese automakers choose to produce in Europe and create jobs for Europeans, their products will be allowed into the European market—a requirement mirroring what China once demanded of European automakers."

For Germany’s traditional automotive industry, 2026 will be a decisive year. In the rapidly growing electric and hybrid vehicle market, even the renowned Volkswagen can only maintain a low single-digit market share. For Volkswagen, headquartered in Wolfsburg, regaining its former market dominance is no longer possible, but securing a place among the top three in the medium term remains a viable goal. To achieve this, Volkswagen is investing more heavily in localization in China than any other foreign automaker. As part of this strategy, Volkswagen has already begun joint ventures with Chinese companies such as XPeng and Horizon Robotics. Meanwhile, Volkswagen is transferring an increasing amount of research and development work to its strategic base in Hefei, China."

The Cologne City Newspaper’s commentary pointed out that in order to reclaim some of the lost Chinese market share, Volkswagen launched its new Jetta X at this year’s Beijing Auto Show. The vehicle not only features design and configuration tailored precisely to Chinese consumer preferences, but also comes with a price tag under 100,000 RMB—clearly indicating that Volkswagen has fully entered the brutal price war:

"From a political standpoint, Volkswagen’s China strategy is clearly risky: As a traditional German automaker, Volkswagen has become increasingly dependent on China. Yet, it appears Volkswagen has no alternative. After all, over one-third of all new vehicles sold globally are sold in China. Moreover, this year’s Beijing Auto Show revealed a clear trend: in the field of electric vehicles, China is setting ever more industry standards. Given this, anyone hoping to secure a foothold in the global automotive market must first establish a solid presence in China."

Source: DW

Original article: toutiao.com/article/1863842778563913/

Disclaimer: The views expressed in this article are solely those of the author.