China, Europe grow stronger auto industry ties amid closer cooperation

This photo taken on April 18, 2023 shows the overlap patch door ring exhibited at the Gestamp booth of the 20th Shanghai International Automobile Industry Exhibition in Shanghai, east China.(Gestamp/Handout via Xinhua)

At the Tiexi plant of BMW Brilliance Automotive Ltd. in northeastern China, rows of sleek electric vehicles await global delivery. Just a street away, an auto parts factory buzzes with production activities, crafting components for car assembly.

The auto parts factory, which belongs to Gestamp, a Spanish multinational specializing in the design, development and manufacturing of highly engineered metal components, is one among many auto parts suppliers surrounding the plant, situated in Shenyang, the capital of northeast China's Liaoning Province.

With European automotive giants like BMW entrenching themselves in the Chinese market, a large number of supporting suppliers have been prompted to set up facilities nearby, which fosters closer integration between the Chinese and European automotive sectors.

According to Ren Tingfu, general manager of Gestamp's Shenyang factory, the factory has steadily expanded its production capacity with substantial cumulative investments since its establishment in 2012.

"To meet the growing demand from our clients, we invested in expanding the automotive component project in 2023, which will soon be operational," Ren added.

Gestamp, which began operations in China in 2007, now operates 14 factories and two research and development (R&D) centers and employs more than 5,000 people in China.

"China boasts a vast, innovative and dynamic auto market," said Antonio Lopez Arce, CEO of Gestamp's Asia division, emphasizing the strategic importance of the company's strong investment and considerable cooperation in China. "We continue to introduce our cutting-edge body in white, chassis and battery box technologies and products to China."

In recent years, China's auto market has accelerated its shift towards new energy vehicles (NEVs), prompting significant investment and expanded production from European automakers.

In April 2024, BMW announced an additional investment of 20 billion yuan (about 2.8 billion U.S. dollars) in its production base in Shenyang to localize the production of a new generation of BMW models by 2026. Volkswagen AG established its largest R&D center outside of Germany in China, focusing on R&D of intelligent networked vehicles.

The thriving Chinese NEV market also offers fresh opportunities to auto parts firms like Gestamp, which is increasing its investment in R&D for new technologies and applications to cater to the needs of Chinese original equipment manufacturers for electric, lightweight and environmentally friendly parts.

Furthermore, German auto supplier ZF Group launched an NEV auto parts industrial park in Shenyang in 2023, with an approximately 2.2 billion yuan investment. Bosch, another German parts supplier, has expanded its NEV core components and autonomous driving R&D and manufacturing base in Suzhou, east China's Jiangsu Province, and it is slated to be operational later this year.

Optimism among carmakers and auto parts firms is buoyed by rising demand in the Chinese market. Data from the China Association of Automobile Manufacturers shows that in the first half of 2024, NEV production and sales in the country had reached 4.93 million units and 4.94 million units, respectively, marking respective year-on-year increases of 30.1 percent and 32 percent.

In recent times, more Chinese automakers and supply chain companies have begun establishing factories in Europe, engaging in technological collaborations concerning NEVs.

In April this year, Spanish auto company Ebro-EV Motors and China's Chery Automobile signed a pact to develop NEVs through a joint venture in Barcelona. Additionally, Chinese carmaker BYD in December 2023 announced the establishment of an NEV production base in Hungary to help bolster local green energy ecosystems.

At the 15th Annual Meeting of the New Champions, also known as the 2024 Summer Davos, Chinese companies showcased their technological advancements to a global audience. Zeng Yuqun, board chairman of Chinese battery giant Contemporary Amperex Technology Co., Ltd., highlighted the company's commitment to providing high-quality batteries globally to promote green travel.

"In the 1980s, the establishment of SAIC Volkswagen Automotive Co., Ltd., a joint venture of Volkswagen AG and Chinese carmaker SAIC Motor, significantly bolstered China's auto industry," said Cao Xudong, CEO of Momenta, a Chinese autonomous driving solutions provider. "Today, China's strides in NEVs benefit nations worldwide, reflecting mutually beneficial cooperation."