Western automakers plan to return to China using local software - FT

Western automakers will compete with local rivals in China this week by launching new software and intelligent features in cars produced jointly with local partners.

This is how they are trying to return to the world's largest car market, UNN writes with reference to Financial Times.

Details

The annual auto show, which will be held in Shanghai this year, will be the first real test for the updated strategies of Western automakers. Volkswagen, Toyota, and other companies are adopting a "China for China" strategy to win back consumers who have switched to more affordable and technologically advanced electric vehicles from domestic brands.

Mercedes-Benz will launch its Electric CLA model in China later this year. Its central "brain" will be an operating system developed jointly with a local research and development team. The car will have improved range and charging speed, as well as more advanced autonomous capabilities.

We are very confident in our technology and intelligence now. This will be a battle of numbers - who has the longer range. But I think we will stand very, very firmly in the front row in this race with the CLA

Competitor BMW will also launch its Neue Klasse electric vehicles in China starting next year with the involvement of local R&D and design teams and local technology partners Alibaba and Huawei.

In the first two months of this year, their market share in China was 31%, less than half of the 64% they held in 2020, with Geely and Byd overtaking Volkswagen, which had long held the position of best-selling brand, according to Shanghai Consultancy Automobility.

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Sales of electric and plug-in hybrid vehicles account for 45% of new car sales in China. Some Western auto executives admit they are unlikely to ever regain their dominance in China, but automakers are keen to recover their position, especially amid the escalating economic war between Beijing and Washington, which is putting increasing pressure on the industry.

To do this, many are resorting to partnerships with Chinese companies to adopt their technological know-how and respond more quickly to Chinese consumer demands. This echoes the strategy Chinese companies chose in the 1980s when they learned from their Western competitors.

Addition

Mercedes-Benz once again reported a slowdown in sales. First-quarter figures show a 7% year-on-year decline, driven by a 21% drop in van sales.

In response to new tariffs imposed by Donald Trump, the German automaker Audi temporarily suspended exports of its cars to the United States.