Major German auto suppliers, including Bosch, ZF Friedrichshafen, and Continental, are eagerly seeking to strengthen their partnerships with Chinese electric vehicle (EV) manufacturers as these companies set their sights on the European EV market. While Western automakers express concerns about potential competition from Chinese EVs in Europe, suppliers see this as an opportunity to offer parts and support to the rising Chinese automakers.
Bosch, a key player in the automotive industry, has already established collaborations with several Chinese EV manufacturers. For instance, it is working with Chinese EV maker BYD to develop Advanced Driver Assistance Systems (ADAS). Bosch is also engaged with luxury EV manufacturer Human Horizons and Nio. Stefan Hartung, CEO of Bosch, is optimistic about the future and believes that Chinese automakers will gradually adapt their vehicles to meet European market demands based on user feedback and experience. This evolution offers significant growth potential for suppliers like Bosch.
On the other hand, European automakers are concerned about the competitive threat posed by more affordable Chinese EVs that could potentially erode their market share in Europe. Nevertheless, suppliers such as ZF Friedrichshafen remain upbeat about the opportunities that lie ahead. ZF already has a significant presence in China, with about 40% of its China revenue generated through collaborations with Chinese carmakers. ZF’s CEO, Holger Klein, has disclosed ongoing discussions with Chinese customers regarding the establishment of production plants in Europe. This indicates the intention of Chinese automakers to establish a firm foothold in the European market.
Continental, another prominent automotive supplier, anticipates the expansion of Chinese automakers into Europe and stands ready to provide support. Nikolai Setzer, CEO of Continental, highlights the company’s global capabilities in meeting vehicle standards across various regions. Continental is well-prepared to handle increased demand from Chinese customers in Europe, eliminating the need for new production facilities.
The European EV market has been on a consistent growth trajectory, with sales surging by nearly 55% in the first seven months of 2023, constituting approximately 13% of total car sales. Chinese EVs often come with a more budget-friendly price tag compared to their European counterparts, which has raised concerns among European automakers. However, suppliers view this as a unique opportunity to foster more robust collaborations with Chinese EV manufacturers and provide the support needed for their successful entry into the European market.
This evolving trend underscores the dynamic nature of the global automotive industry, where suppliers strategically position themselves to cater to the evolving needs of emerging players in the rapidly expanding EV sector.