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Foreign automakers eager for Chinese partners at Beijing auto show
Apr 26, 2024 10:13 AM

BEIJING, April 26 (Reuters) - Global automakers

including Volkswagen and Toyota ( TM ) came to this

year's Beijing auto show looking to catch up to surging China EV

makers that are dominating the world's largest auto market.

The show that started this week showcased a marked shift in

attitude among some foreign automakers, industry executives

said. After being impressed by the bold leaps made by BYD

and other Chinese automakers at last year's event in

Shanghai, foreign automakers are now avidly searching for

Chinese partners and announcing new tie-ups, the executives

said.

Among the most active were European and Japanese automakers,

with announcements coming from Toyota Motor ( TM ) that it would team

up with Chinese gaming and social media giant Tencent ( TCTZF )

on artificial intelligence and big data, and Volkswagen

promoting its partnership with Chinese EV startup XPeng ( XPEV )

.

An executive from Renault said on Friday it had

"pivotal conversations" with Chinese EV maker Li Auto ( LI )

and Xiaomi ( XIACF ), the smartphone maker that just introduced

its first car, to explore EV and smart-vehicle technologies.

Nissan ( NSANF ), meanwhile, announced a tie-up with Chinese tech

firm Baidu ( BIDU ) to carry out research on AI and "smart cars."

Nissan ( NSANF ) CEO Makoto Uchida visited several booths including that

of Chinese tech giant Huawei, which is becoming a major auto

supplier.

European automakers sent "much more senior management" to

visit the booth of LIDAR remote sensing technology supplier

Hesai Technology this year versus last year, said Bob in den

Bosch, senior vice president of global sales at the

Shanghai-headquartered firm.

"They're looking for a partner to close the gap," he said.

"They came here with a plan and a mission."

Foreign brands have dominated China's auto business since

the 1990s and have brought extensive know-how to the Asian

country. But last year, foreign brands' collective share of

China's passenger car market fell to 48%, down sharply from 57%

just two years earlier, according to data from the China

Association of Automobile Manufacturers.

GOING LOCAL

German automakers including Volkswagen and Mercedes,

in particular, emphasized their efforts to localize production

and invest more in local partnerships, with Volkswagen saying

repeatedly its goal was to remain the best-selling foreign

automaker in China into 2030.

Hildegard Mueller, president of Germany's powerful car lobby

VDA, told Reuters that the German automakers are, in addition,

exploring new marketing strategies to attract Chinese consumers.

This includes partnering with the country's army of car

influencers, who promote and discuss new vehicle models and

trends with their large followings on social media.

"It's huge (online) traffic and huge potential," she said.

The market share in China of Toyota ( TM ), the world's top-selling

automaker, declined last year, according to data from the China

Passenger Car Association (CPCA). Toyota's ( TM ) China joint ventures

with GAC and FAW held a combined 7.9% of the Chinese auto market

last year, compared with an 8.6% share in 2022, the CPCA said.

Toyota ( TM ) has said it will include technology from Tencent ( TCTZF ) in a

China-made passenger vehicle the Japanese automaker will put on

sale this year as part of a new tie-up.

On Thursday, Toyota ( TM ) took care to emphasize the new tie-up,

with its chief technology officer, Hiroki Nakajima, inviting a

senior Tencent ( TCTZF ) executive onstage to its auto show presentation.

"We want to, with Toyota ( TM ), build products and services that

are closer to consumers, to jointly build mobility solutions of

the future and we look forward to the fruits of our

cooperation," said Dowson Tong, CEO of Tencent Cloud and Smart

Industries Group.

PESSIMISM

Some foreign auto executives were more pessimistic about

their ability to fight back.

Katsuhide Moriyama, president of GAC Honda Automobile,

Honda's ( HMC ) joint venture with Guangzhou Automobile Group

, cited how China's leading EV makers have found ways

to slash vehicle development time.

"Manufacturers should shorten the lead time to compete with

those competitors," Moriyama said outside the automaker's booth

at the show. "But a two-year model cycle is too short for us."

The number of American car executives paled compared with

visitors from other foreign markets, noted Hesai's In den

Bosch.

The market share in China of major American brands including

Ford and General Motors ( GM ) has plummeted amid

declining gasoline-car sales and the shift from foreign to

Chinese brands.

Ford's chief financial officer, John Lawler, told reporters

in the United States on Wednesday that the automaker wants to

maintain its existing China presence but is not planning to

invest more.

"We're not putting capital into China," he said.

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