China is and will remain the most important market for German carmakers. Beijing is continuing to woo the Germans, as we saw when the Ministry of Industry eased up on controversial e-car sales quotas. The People’s Republic is presenting an open-minded image, but it is already clear that doing business there will get tougher for the Germans. China wants to lead the global car market. And to do that, the political brass is relying on a mix of subsidies and covert protectionism.
The Germans have ignored the subject far too long. VW, Daimler, and BMW have been resting on the laurels of their successes in China. For years, the Chinese government has been signaling that they should focus on future technologies like electromobility and automated vehicles (AVs). But they waved that off. The market isn’t ready, they said in unison.
But conditions have changed. More than any other country in the world, China is radically focusing on developing electromobility. More than half a million e-cars and hybrid cars, vehicles with electric and combustion engines, were sold there last year. At first, Beijing’s economic planners were bogged down in the finer details and lagged behind their expectations. But, they have readjusted and now business is really taking off. Nowhere will this be more evident than at the Auto Shanghai 2017 international exhibition starting on Wednesday.
BMW, Daimler, and Audi are poorly represented among the electric cars humming down the streets of Beijing, Shanghai, and Guangzhou. Vehicles from China’s king of e-cars, BYD, or the state-owned SAIC and BAIC, make up the bulk, while wealthier Chinese buy Tesla. Elon Musk’s company was able to triple its Chinese sales to cross the $1 billion mark last year.