German car brands look to China in wake of auto reforms

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In the wake of Premier Li Keqiang’s visit to Germany earlier this week, a series of high-profile investment deals have been agreed between German automakers and Chinese partners, in a firm sign of confidence in the world’s largest auto market and China’s reform and opening up.

Major German car manufacturers, including BMW, Audi and Volkswagen, have all confirmed significant deals in the past week, with a particular focus on the new energy vehicle (NEV) sector.

The deals came after China’s capital Beijing on Friday gave Mercedes’ parent company Daimler permission to test autonomous vehicles on the city’s roads, making it the first international company to receive such a license.

Daimler's Smart Vision EQ at MWC in Shanghai./VCG Photo

A joint press conference on Monday by Premier Li Keqiang and German Chancellor Angela Merkel saw both sides voice their support for multilateralism and a rules-based global trade order, with Merkel praising China for opening up its markets to foreign investment.

In April, China announced plans to remove foreign ownership caps on vehicle joint ventures, with the National Development and Reform Commission saying the country will allow full foreign ownership following a five-year transition period and scrap foreign ownership caps on firms making fully electric and plug-in hybrid vehicles in 2018.

BMW joins forces with CATL on electric Mini

German car giant BMW confirmed on Monday that it would work with Chinese battery manufacturer CATL on battery technology for a new range of electric Minis, slated for launch next year.

BMW struck a deal to purchase 4 billion euros (4.7 billion US dollars) worth of batteries from CATL, which will also be used in the brand’s “iNext” electric limousine.

The new Mini will also be manufactured in China, as part of a 50:50 joint venture between BMW and Chinese carmaker Great Wall, which was announced on Tuesday.

The Mini Electric Concept Car is displayed at the Los Angeles Auto Show in Los Angeles, California US November 29, 2017. /VCG Photo

The JV will mark the first time the Mini has been produced outside of Europe, with the new electric model also set to be manufactured in the UK.

The production line will be established in east China’s Jiangsu Province, with BMW Chairman Harald Krueger calling the deal “a clear win-win for the BMW Group and Great Wall Motor, enabling us to contribute to China’s ambitious plans to ramp-up new energy vehicles and reduce emissions in the mobility sector.”

Read More: China's CATL to build electric car battery plant in Germany

Continental drives forward with Didi Chuxing

According to Xinhua, German tire and transport equipment manufacturer Continental on Tuesday signed a strategic cooperation agreement with China’s ride-hailing platform Didi Chuxing, with both sides set to cooperate on intelligent transportation services in China.

A statement from Didi said the two parties will explore cooperation mainly in the areas of intelligent and connected vehicles (ICV) and customized new energy vehicles.

Continental will provide components and equipment for a range of “purpose-built” vehicles operating under Didi. The Chinese company announced in April it had struck deals with 30 other auto companies, with plans for a fleet of vehicles adapted to Didi’s needs expected to launch in 2020.

VW to join FAW on smart vehicle technology

Tuesday also saw Volkswagen, the world’s biggest carmaker, sign memorandums of understanding (MOU) with China’s FAW Group and the China Intelligent and Connected Vehicles Research Institute.

The deals will see cooperation on connected vehicles and driverless technology, and comes after Volkswagen announced plans late last year for 1.5 million electric vehicle sales in China by 2025.

On Monday, Volkswagen announced that it would establish a new joint venture with Chinese automaker JAC, as part of an ambitious launch of more than 40 new locally made NEVs and plug-in hybrid vehicles in the next seven years, under the company’s Volkswagen, Seat, Audi and Skoda brands.

Audi to join up with Huawei on connected car tech

Audi, which saw its China sales in the first half of the year increase by 20.3 percent, announced on Tuesday its own MOU with Chinese telecommunications giant Huawei.

While few details were revealed about the makeup of the deal, a statement said Audi and Huawei would work on “intelligent driving and the digitalization of services in the vehicle environment.”

Audi's sales from January to June totalled around 949,300 units worldwide, among them, 306,590 units were sold to Chinese customers. /VCG Photo

According to TechCrunch, the partnership will see both sides develop new LTE-V technology – a new cellular standard that will be applied specifically to intelligent vehicles.

A statement by Huawei said “with increased innovation in mobile connectivity, Huawei is committed to transforming the driving experience.”

Audi, in its own statement, said “we are intensifying our joint research with Huawei in the area of intelligent connected vehicles. Our aim is to improve safety and optimize traffic flows in order to create intelligent cities. The concepts will initially be concentrated on the Chinese market.”