Mercedes-Benz and BMW executives visit China with the German Chancellor, and car companies reaffirm their firm commitment to investment in China

Our reporters Yin Limei and Tong Haihua report from Beijing

"The German market welcomes Chinese cars. On April 15, the day after his visit to China, German Chancellor Olaf Scholz made the above statement. Scholz believes that the European market must compete openly and fairly with Chinese cars, and when Japanese and South Korean cars entered the European market, people were worried that Japanese and Korean cars would conquer the European market, but "this did not happen." "The same applies between China and Germany," he said. ”

In addition to the three German cabinet ministers for the environment, agriculture and transport, Scholz also included more than 10 German business executives, including Kang Linsong, chairman of the board of directors of Mercedes-Benz Group, and Zipzer, chairman of BMW Group. It can be seen that "automobile" is one of the key words of Scholz's visit to China.

The reporter of "China Business Daily" learned from Mercedes-Benz that Kang Linsong, a member of the delegation accompanying Scholz's visit to China, said that Mercedes-Benz is optimistic about the development potential of the Chinese market, and will continue to invest in China in the future, strengthen cooperation with Chinese partners, and continue to contribute to Sino-German economic and trade cooperation. BMW Group also told reporters that Zipzer accompanied Scholz and a delegation of entrepreneurs to China, emphasizing its firm commitment to promoting prosperity through deepening cooperation and continuously expanding investment in China.

Germany is accelerating its energy transition. What impact will Scholz's visit to China with the "helmsmen" of Mercedes-Benz and BMW have on Sino-German cooperation in the automobile industry? Cui Dongshu, secretary general of the National Passenger Car Market Information Association, told reporters in an interview that the German automobile industry chain has huge advantages, and China has certain technological advantages in new energy vehicles.

"The German Chancellor's visit to China with Mercedes-Benz, BMW and other car company executives can strengthen the belief of German companies in investing in China on the one hand, and on the other hand, through observation and exchanges, it can help accelerate the electrification and intelligent transformation and transformation of the German auto industry. Lu Shengyun, the founder of Qianjue Consulting and the former project manager of Roland Berger Consulting, said in an interview with reporters that at the same time, compared with Germany, China has more software engineers with higher "cost performance" and higher level. If German automakers want to carry out digital transformation, or if they want to take the lead in the smart car track in the future, software engineers are indispensable, how should German universities train software engineers, or should they focus more on continuing to train mechanical engineers?

Automotive is a key area for deepening industrial cooperation between China and Germany

Chongqing is the first stop of Scholz's visit to China. On April 14, after the special plane arrived in Chongqing for a short rest, Scholz visited Bosch Hydrogen Power Systems (Chongqing) Co., Ltd., a joint venture between Bosch Group and Qingling Automobile Group, the world's largest automotive technology supplier, and visited a variety of hydrogen power products and hydrogen fuel cell solutions developed and produced by the company. The hydrogen powertrain is known as the "heart" of hydrogen fuel cell vehicles.

At a time when the EU is launching a countervailing investigation into China's electric vehicles, Scholz's visit to China will cause speculation that Bosch Hydrogen Power Systems (Chongqing) Co., Ltd. will be the first site of the visit.

"The German Chancellor's visit to China is to weaken the possible trade friction problem from the political level. From this point of view, Scholz released a message that German car companies should do business in China how they want, and Sino-German cooperation is still an important part of Germany's foreign strategy. Lu Shengyun told reporters.

Over the years, cooperation in the automotive industry has been a model and benchmark for Sino-German cooperation. The reporter noted that on April 13, on the eve of Scholz's visit to China, the German Association of the Automotive Industry (VDA), representing 650 automobile and parts companies, issued a statement: the German Association of the Automotive Industry opposes the EU's punitive tariffs on electric vehicles imported from China, saying that this may trigger a trade war and jeopardize the EU and German automotive industry's goal of promoting electric vehicles and moving towards digital transformation.

"The current business with China provides a lot of employment opportunities in Germany. Our business is currently in the process of raising a record amount of transition finance, also from the core sales market of China. VDA President Hildegard Müller said.

Scholz and the German Association of the Automotive Industry have released a strong and clear signal that Germany wants to further strengthen the exchanges and cooperation and deep integration of the Sino-German automotive industry.

Cui Dongshu told reporters that Mercedes-Benz, BMW, Volkswagen and other German car companies have entered the Chinese market for more than 30 years, and the standard system and design concept set up by the German automobile industry have formed a huge role in stimulating the development of China's automobile industry. Under the concept of energy conservation and environmental protection, we should focus on how to make China and Germany complement each other's advantages and achieve coordinated development between China and Germany. At this stage, China has gained a relatively large advantage in Southeast Asia, South America, Africa, Australia and other markets, and if European companies do not cooperate with Chinese companies, they may lose in these markets. However, European companies, including Germany, still have obvious advantages in basic technology research and development and industrial chain, without these basic technologies, the continental automotive industry will also encounter bottlenecks in the development process.

BMW, Mercedes-Benz and Volkswagen all emphasized continued investment in China

Mercedes-Benz, BMW, and Volkswagen are the most familiar car companies among Chinese consumers, and the Chinese market is crucial for German car companies, and China is the largest single market for BMW, Mercedes-Benz, and Volkswagen, the three German car companies, in the world.

According to official data, BMW's sales in China accounted for 32% of total sales in fiscal 2023, reaching 824,900 units, Mercedes-Benz's sales in China accounted for 36% of total sales, much higher than the second place in the United States (15%), and Volkswagen's sales in China accounted for more than 30% of total sales, reaching 3.2 million units.

Based on the importance of the Chinese market, the senior management of Mercedes-Benz, BMW, and Volkswagen, three German car companies, have repeatedly stated on many occasions that they will continue to invest in China in the future and increase the layout of their business in China.

"We welcome China's continued high-level opening-up and optimism about the development potential of the Chinese market. China plays an important role in Mercedes-Benz's global strategy, not only as our largest single market, but also as one of the world's largest Mercedes-Benz production sites and technology innovation centers. During Scholz's visit to China, Kang Linsong said that in the future, Mercedes-Benz will continue to invest in China, strengthen cooperation with Chinese partners, vigorously promote electrification and digital transformation, and continue to contribute to Sino-German economic and trade cooperation.

Kang Linsong said that in the past two years, the Shanghai R&D center, which focuses on digital innovation, has become the fastest-growing team in the Mercedes-Benz global R&D network. "We are delighted to open the new building of our Shanghai R&D center in April, which marks a new stage of our local R&D development. We will also continue to contribute to technological innovation in the field of intelligent and connected vehicles in China." ”

Zipzer also spoke out again. He said that the BMW Group has been rooted in China for 30 years and has benefited from the German-Chinese free trade and China's high-level opening-up policy. "China is the future and the BMW Group's largest market in the world. We are confident in the prospects of the Chinese market, and we are determined to continue to invest in China and make a greater contribution to deepening German-Chinese cooperation. ”

Volkswagen also made its position clear. On April 14, Volkswagen Group CEO Bloom rejected "decoupling", saying that "this is not possible for the German economy, because hundreds of thousands of jobs in Germany depend on cooperation with China, and Volkswagen will continue to invest in China", according to the German "Stock Exchange Daily".

The reporter learned from Volkswagen that on the eve of Scholz's visit to China, Volkswagen Group announced that it would invest 2.5 billion euros (about 19.195 billion yuan) to expand its business in China. At the same time, the Volkswagen Group will produce two Volkswagen-branded models jointly developed with Xpeng Motors in Hefei, the first of which is a midsize SUV and is scheduled to start production in 2026.

He called for further promotion of economic and trade exchanges between China and Germany

This year marks the 10th anniversary of the establishment of the all-round strategic partnership between China and Germany. Against the backdrop of profound changes in global geopolitics, Scholz, as the first leader of a major Western country to visit China this year, has attracted much attention.

Scholz stayed in China for a total of three days, the largest number of days he has visited abroad since he became chancellor, and economic and trade issues were the focus of Scholz's visit to China.

"I am glad that at this stage, there is a good dialogue and exchange between our two countries. We are on the right path. On April 15, Scholz said that he looked forward to taking this visit as an opportunity to further promote Sino-German economic and trade exchanges, work together to address global challenges such as climate change and green transformation, support more German companies to develop in Shanghai, strengthen practical cooperation in scientific and technological innovation, green and low-carbon and other fields, and better achieve win-win development. Scholz believes that China and Germany need to further expand cooperation in the fields of innovative technology research and development, climate change, renewable energy development, trade and investment.

In fact, China and Germany are highly economically interconnected. Despite the German government's call for investment diversification, German direct investment in China has risen to record levels. According to statistics from the German Institute for Economic Research (IW Cologne) according to the Bundesbank, German direct investment in China in 2023 will increase by 4% over the previous year, with a total investment of 11.9 billion euros. Since 2016, China has been Germany's largest trading partner for eight consecutive years. Just a few days ago, German car giant Volkswagen AG announced that it would invest 2.5 billion euros to expand its operations in China.

Jürgen Matthes, an expert at the German Institute for Economic Research, said: "After reaching a high value in the previous two years, it has reached a new high. "From 2021 to 2023 alone, German companies will invest as much in China as they did from 2015 to 2020.

According to a report by the German Institute for Economic Research, China's share of all foreign direct investment in Germany, including Hong Kong, rose to 10.3% in 2023, surpassing the 10% mark for the first time since 2014. German foreign direct investment fell from almost 170 billion euros to 116 billion euros, contrary to the trend of growth in Chinese investment.

Sino-German economic and trade cooperation is also an important part of China's efforts to strengthen economic and trade relations with other countries. "Since the establishment of diplomatic relations between China and Germany 52 years ago, bilateral economic and trade cooperation has developed healthily and steadily, Germany has been China's largest trading partner in Europe for 49 consecutive years, China has been Germany's largest trading partner in the world for 8 consecutive years, Sino-German trade accounts for 30% of China-EU trade, and German investment in China accounts for 30% of EU investment in China. Bilateral economic and trade cooperation is not only the 'ballast stone' of China-Germany relations, but also the 'stabilizer' of China-EU relations. On the morning of April 5, the "Invest in China" German special promotion conference was held in Stuttgart, said Ling Ji, vice minister of commerce and deputy representative of international trade negotiations.

A number of interviewed experts in the economic field believe that economic and trade relations are the cornerstone of Sino-German relations, and Scholz's visit to China is of great significance for consolidating Sino-German relations and consolidating Sino-German economic and trade cooperation.