Problems of German manufacturers: car manufacturers are looking for inspiration in China

Because they are struggling so hard in the world’s largest car market, German manufacturers in China are increasingly considering what they can learn from their Chinese rivals. For a long time it was the other way around.

Numerous influencers are pushing between the cars, especially those of Chinese car brands. With selfie sticks and tripods, they sometimes stand right next to each other while doing live streams in online networks and thus advertising directly from the auto show in Shanghai. The electric cars from BYD and other Chinese private brands are popular – and above all cheap, says auto blogger Heqi Zhou: “German car manufacturers don’t have such cheap prices. For normal people, ‘inexpensive’ is very important.”

E-cars are in demand

Volkswagen is now no longer number one in the Chinese market. Chinese automaker BYD’s cars are more popular with customers in China. Electric cars in particular are in demand in China. But German car manufacturers are having a hard time with that.

At the world’s largest auto show in Shanghai, VW, BMW and Mercedes presented new fully electric cars. There are “already many features” in the Munich manufacturer’s cars that are inspired by China, said BMW boss Oliver Zipse at the presentation of the new BMW i7 electric sedan. An example is the entertainment system.

It should be a lot of entertainment

Software and the role of tech companies have gained prominence within the Chinese automotive industry in recent years. German companies did not recognize this development in time, says Chinese car expert Tu Le from the consulting firm Sino Auto Insights.

“It really showed how little they really understand about the Chinese market,” Tu Le said. “The Chinese electric car manufacturers are faster, more flexible, they are experts in the software. This gave them the opportunity to take market share away from the German car manufacturers.”

Great awakening for VW & Co.

For German car manufacturers, it is the great awakening: German technology is no longer in demand, but Chinese. For example, Volkswagen invested more than two billion euros in the Chinese software company Horizon Robotics.

Another billion euros are now to flow into a new innovation center in the southern Chinese city of Hefei. This was announced by VW on the sidelines of the auto show in Shanghai. In addition, production processes through to the finished car are to become faster in the future.

Nio hopes for a 20 percent market share in Europe

Chinese e-cars are also on the rise on the world market. China is only just behind Germany in car exports. William Li, founder and boss of the Chinese manufacturer Nio, has big plans in Europe. The Chinese brand has also been available in Germany since autumn last year. “Of course we hope that we can gain more market share in China, and in Europe we hope to achieve a market share of around 20 percent, which we think is a relatively healthy goal in the long term,” says the auto manager.

Antonia Hmaidi from the China research institute Merics in Berlin warns against data theft and misuse of Chinese technology and software in cars. If the data is stored in China, the Chinese government can have access to it. Your influence and control options are very extensive, above all, the government can request data.

Location data could be interesting for government

“A lot of this data, which is car-specific, is actually very important for a government,” says Hmaidi. “This can be location data. It can also be data on driving behavior and, for example, how risky a person is behaving.”

The Chinese government can request information on this from companies in the country, and no Chinese company has the option of refusing.