"Everything has changed": foreign car groups embrace China's homegrown technology

Global Tech

2024-05-05 10:34Published in Beijing

Germany's Volkswagen first announced a series of groundbreaking partnerships with Chinese technology companies. Now, well-known car brands in South Korea and Japan have also decided that the only way to survive in the highly competitive Chinese car market is to buy Chinese technology.

On April 30, at the Beijing Auto Show, visitors visited an AI digital chassis in the Geely Automobile exhibition area. (Photo by Xinhua News Agency reporter Zhang Chenlin)

Recently, Toyota Motor Corporation of Japan chose the Beijing Motor Show, China's most important annual industry event, to announce a new partnership with Tencent. The Japanese automaker, the world's largest by sales, will work with China's most valuable listed company to develop services for domestic customers, including installing Tencent's artificial intelligence software and other cloud-based software in its cars. Nissan Motor has announced a similar partnership with search giant Baidu to use Baidu's generative AI services in the cars it produces. South Korea's Hyundai Motor, whose sales in China have plummeted in recent years, announced at the Beijing Motor Show that it would cooperate with China's CATL on automotive batteries. This is a cold shoulder for its main supplier, South Korean battery company SK On.

Analysts and industry executives see the three deals as a highlight that a growing number of multinationals believe that the only way to catch up with Chinese automakers, which are focused on electric vehicles and advanced technology, is to incorporate the technology they use into their own models.

Separately, there is news that Tesla is working with Chinese search giant Baidu to adopt Chinese mapping and navigation technology. Tesla CEO Elon Musk is about to launch a model with more advanced driver assistance features in the Chinese market.

"Four years ago, I thought it was almost certain that Chinese car companies would only follow the global [manufacturers], but now everything seems to have changed," said Xie Tiandi, a spokesman for Zhuoyu Technology. "Joy Technology is a spin-off from DJI, the world's largest drone manufacturer, and is currently working with Volkswagen of Germany to develop assisted driving technology.

In March, foreign automakers' share of sales in China, the world's largest auto market, fell to a record low of 40 percent, according to data from the Shanghai-based consultancy Murto Business Consulting. In recent weeks, for the first time, battery electric vehicles and plug-in hybrids have accounted for more than half of new car sales in China.

Jürgen Raels, head of global automotive at consulting firm Accenture, predicts that the Chinese market will see "closer collaboration across the ecosystem" as multinational automakers seek to "reinvent" their business models to keep pace with the rapid transition of local Chinese automakers to make smarter electric vehicles.

"The most critical thing now is acceleration," he said. In China, it's seen as a tech industry, and that's really the right mindset. ”

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