Bond blossoms between EU, domestic carmakers

Chinese and European carmakers are confident in their business prospects in each other's home turf, reflecting the resilience and potential of Sino-EU cooperation in the automotive industry.

Last week, German carmaker Volkswagen inked a new deal with its longtime partner FAW to introduce a slew of new models developed exclusively for the Chinese market.

Ralf Brandstaetter, chairman and CEO of Volkswagen Group China, said: "Our new technology setup, exclusively tailored to China, will enable our joint ventures to respond even quicker and more effectively to new customer requirements and market changes in the future."

Starting in 2026, the joint venture FAW-Volkswagen is scheduled to introduce 10 new Volkswagen brand models, including nine new energy vehicles, across diverse segments.

Brandstaetter said its "enduring partnership with FAW is a strong pillar of our success in China," adding that the move aligns with its strategy of "In China, for China".

Also last week, BMW announced a partnership with Huawei to develop an in-car digital ecosystem in China based on the technology company's Harmony operating system, which is used in its phones and other smart devices.

"In China, nearly a quarter of MyBMW App users rely on Huawei devices. By deeply integrating with the HarmonyOS ecosystem, BMW will enhance in-car applications and digital connectivity services for HarmonyOS users," said Sean Green, president and CEO of BMW Group Region China.

Chinese Commerce Minister Wang Wentao said auto industries in China and Europe have solid foundations and great potential for cooperation.

"China welcomes European car manufacturers to increase investments and deepen their presence in the Chinese market," said Wang in a video call with Ola Kaellenius, president of the European Automobile Manufacturers' Association and chairman of the board of management of Mercedes-Benz Group, last month.

Mercedes-Benz is celebrating its 20th anniversary of research and development and production in China this year. From 2019 to 2024, the German carmaker spent 10.5 billion yuan ($1.44 billion) in the country to accelerate the localization of technologies and products.

Chinese carmakers and suppliers are revving up their presence in European markets despite the tariffs that the European Union has slapped on China-made electric vehicles.

Earlier this year, Chinese startup Xpeng entered the four European nations of Poland, Switzerland, the Czech Republic, and Slovakia, with its new G9 and G6 electric SUVs slated to go on sale from the second quarter of this year.

Xpeng, which is a partner of Volkswagen in China, is now available in 14 European markets. It delivered its 10,000th vehicle in Germany in late 2024.

Chinese lidar producer Hesai said in early March that it had won a multiyear deal from a European carmaker. According to consulting firm Yole Group, Hesai accounts for 37 percent of the global lidar market.

Sales of China's largest new energy vehicle maker, BYD, skyrocketed in the United Kingdom by 550.8 percent to 1,614 units in January, seizing 1.2 percent of the country's overall vehicle market share.

It was the first time that the Warren Buffett-backed carmaker had outsold Tesla on a monthly basis. Elon Musk's company saw sales fall 8 percent to 1,458 units in the same month, said the Society of Motor Manufacturers and Traders in the UK.

BYD's share in the EV market in Western Europe, including the UK, was 2 percent in 2024, according to Schmidt Automotive Research.

SAIC's sales across Europe surged by 37 percent year-on-year in January. Its MG brand has become one of the fastest-growing automotive brands in the region, according to the European Automobile Manufacturers' Association.