Foreign Carmakers Seek Chinese EV Partners on AI, Smart Tech

Foreign carmakers attending this year’s Beijing auto show are looking to partner with their Chinese counterparts on artificial intelligence and other smart car technology.

The show that ends later this week has, so far, 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.

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Among the most active were European and Japanese automakers.

Japan’s Toyota Motor announced it would team up with Chinese gaming and social media giant Tencent on artificial intelligence and big data.

The world’s top-selling automaker said that as part of the tie-up, it will include Tencent technology in a China-made passenger vehicle that will go on sale this year.

Toyota took care to emphasise the new tie-up, with its chief technology officer, Hiroki Nakajima, inviting a senior Tencent executive onstage to its auto show presentation last week.

Separately, Japan’s Nissan also announced a tie-up with Chinese tech firm Baidu to carry out research on AI and “smart cars.”

Nissan CEO Makoto Uchida visited several booths including that of Chinese tech giant Huawei, which is becoming a major auto supplier for local and foreign EV-makers.

Meanwhile, German auto giant Volkswagen was also seen promoting its partnership with Chinese EV startup XPeng.

An executive from Renault also said on Friday it had “pivotal conversations” with Chinese EV maker Li Auto and Xiaomi to explore EV and smart-vehicle technologies. China’s Xiaomi, a smartphone maker, introduced its first electric car earlier this month, which it touted as a rival to Porsche and Tesla.

Interest in local Chinese partnerships comes at a time when foreign carmakers are quickly losing share in the world’s biggest car market.

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.

European carmakers lead China push

German automakers including Volkswagen and Mercedes particularly emphasised their efforts to localise production in China and invest more in local partnerships.

Volkswagen has repeatedly said that its goal is to remain the best-selling foreign automaker in China into 2030.

European automakers also 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.”

Meanwhile, Hildegard Mueller, president of Germany’s powerful car lobby VDA, said that German automakers are further exploring new marketing strategies to attract Chinese consumers.

They include 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.

European carmakers’ search for Chinese partners comes despite ongoing tensions between Brussels and Beijing, especially over the EU’s probe against EV inflows from China.

EU’s probe is driven primarily by concerns over state subsidies for Chinese carmakers. Those subsidies, EU commissioners say, result in unfair advantages for Chinese EV-makers, allowing them to flood the market and eat into local European market share.

American automakers take backseat

Trade tensions did seem to influence the participation of American carmakers at the auto show. The number of car executives from the US at the auto show paled in compared with visitors from other foreign markets, noted Hesai’s In den Bosch.

China and the US have been embattled in a bitter technology war — one that has extended to EVs with president Joe Biden’s recent probe into Chinese cars.

Meanwhile, major American brands including Ford and General Motors have also seen their market share in China plummet amid declining gasoline-car sales and the shift from foreign to Chinese brands.

Ford’s chief financial officer, John Lawler, told reporters in the US last week 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.