China’s innovation capabilities put pressure on German companies in China
24.01.2024
More than 80% of German companies in China admit that China’s current economic performance is on a downward trend, but 64% believe that it is temporary and will rebound within 1-3 years. Half of the German companies surveyed believe that Chinese companies will become industry leaders within five years. Ninety percent of German companies in China have no plans to leave.
(Deutsche Welle Chinese website) On Wednesday (January 24), the German Chamber of Commerce in Greater China (AHK) (also known as the German Chamber of Commerce in China) released2023/24 Business Confidence Survey Report. The survey was conducted in the form of questionnaires from September 5 to October 6 last year, and 566 member companies responded. According to the chamber’s website, the German Chamber of Commerce in China represents 2,100 German companies.
The investigation reached the following main conclusions:
More than half of German companies believe that Chinese innovators will lead their industry within five years.Nearly 40% of companies believe that innovation is the most attractive aspect of the Chinese market. This may be the most striking change in this set of statistics in years.
Although only 5% of German companies currently believe that Chinese companies are innovation leaders in their industry, 46% predict that Chinese companies will become industry leaders in the next five years. In the automotive industry, 11% of German companies believe that Chinese competitors are already innovation leaders, and 58% predict that they will catch up within the next five years.
“Chinese Legion” at the Munich International Motor Show
The “Decisive Battle” between the Old and New Car Worlds
At this year’s Munich International Motor Show (IAA), there was an unprecedented number of car dealers from China, second only to Germany. German media NTV reported that many analysts and reporters believe that this is the “big battle” between the old car world and the new car world. The former is dominated by German manufacturers, while the latter is dominated by electric vehicles from China. The picture shows BYD at the auto show.
“Chinese Legion” at the Munich International Motor Show
German Foreign Minister, what do you think of this “Seal U”?
Traditional auto giants are facing fierce competition from Chinese automakers. In China’s domestic market, BYD outsold Germany’s Volkswagen last year, taking the market leader crown from the German company. The Chinese brand’s advantages in pure electric vehicles are particularly obvious. In the picture, German Foreign Minister Berbock also got into the BYD “Seal U” car to experience it.
“Chinese Legion” at the Munich International Motor Show
BYD is “achieving dreams”
BYD’s English name BYD is the abbreviation of “Build Your Dreams”. At this auto show, BYD showcased six new models that will be launched in Europe. These include the compact car “Dolphin”, with an entry price of less than 30,000 euros. The German Foreign Minister couldn’t help but try the “Seal U”, which sells for less than 45,000 euros. These are prices that might make VW executives sweat. BYD also exhibited high-end models, such as the 7-seater “Denza D9” in the picture.
“Chinese Legion” at the Munich International Motor Show
The world premiere of “Avita 12”
In the picture is the much-anticipated “Avatr 12”, which made its world debut at the IAA. According to Chinese media reports, this is a car jointly developed by CATL, Changan and Huawei, with Huawei providing components such as the HarmonyOS infotainment system. The car is positioned as a luxury medium to large new energy sedan. According to the official introduction of the car dealer, the car adopts a futuristic design, hidden door handles, and has no rear window. Instead, it has a panoramic glass roof and a rear camera.
“Chinese Legion” at the Munich International Motor Show
YOYO PRO looks like smart
This pure electric mini car looks quite similar to the Mercedes-Benz smart at first glance. It is the YOYO PRO from the young Chinese brand XEV (Yoyao Technology). According to Chinese media, the car uses 3D printing technology to provide personalized customization services for the door trim. This car uses a multi-function steering wheel, is equipped with environmentally friendly leather seats and a 10.25-inch large central control screen. It can also be remotely controlled through an app. It is obviously aimed at young consumer groups.
“Chinese Legion” at the Munich International Motor Show
Number of Chinese exhibitors doubled
Compared with the previous IAA, the number of Chinese automobile exhibitors at this auto show has doubled, including Dongfeng Fengxing, Cyrus, BYD, Leapmotor, Xpeng and other brands. Volkswagen of Germany has always occupied the entire IAA showroom with its various models in the past, but this year the showroom area is only about 1,500 square meters. The SERES car (SERES 5) in the picture is a luxury sports electric SUV. According to the car manufacturer, it can accelerate from 0 to 100 kilometers in 3.7 seconds and has a WLTP range of 530 kilometers.
“Chinese Legion” at the Munich International Motor Show
China’s first open-top electric sports car MG Cyberster
The picture shows the MG Cyberster, a convertible electric sports car from the Chinese car brand MG (SAIC MG). MG was once a British car brand, and was later acquired by SAIC, and now it has become an independent domestic brand in China. The convertible electric sports car MG Cyberster was very popular at the auto show, and many visitors wanted to get in and have a try, including Xin Guobin, Vice Minister of the Ministry of Industry and Information Technology of China, who came to the IAA.
More than half of German companies will increase investment, a slight increase from last year
54% of the companies surveyed believe that the investment attractiveness of the Chinese market is declining; the main reason is that 56% of the companies believe that growth prospects are limited.
However, the same number, or 54%, of companies plan to increase investment in China in the next two years.This figure increased slightly by 3 percentage points from the previous survey.which is still far behind the 71% in 2021.
79% of companies said that continued investment is a necessary condition to remain competitive in China. 46% of businesses plan to cooperate with local companies to stay competitive.
Nearly half of German companies have strengthened risk management
44% of companies have taken measures to deal with possible risks. Among them, 83% of companies believe that risks stem from geopolitical tensions. Responses include establishing supply chains independent of China (45%), setting up additional operations outside China (40%), and also including localized R&D (34%).
Economic Perspective | 02.11.2022
Basically optimistic about China’s economic development prospects
More than 80% of the surveyed companies believe that China’s current economic performance is on a downward trend, and 64% believe that it is a temporary economic slowdown and are expected to rebound in the next 1-3 years. 42% of German companies expect that industry development will show a positive trend this year. 78% of the surveyed companies expect to maintain stable growth in the next five years.
When asked “Will your company leave China within the next two years?”, 91% of the companies said “no such plan.” When asked the same question two years ago, the proportion of “no such plan” was 96%.
In addition, 33% of Chinese and German companies believe that legal uncertainty is still one of the main challenges;22% of businesses said they were treated unfairly compared to local competitors. Particularly when it comes to public procurement, more than half (53%) of the companies surveyed encountered obstacles such as a lack of transparency and “buy Chinese” policies.
The German Chamber of Commerce in China said that companies are cautiously optimistic about this year’s prospects. The survey shows that 42% of German companies are basically optimistic about the development of the industry in 2024, 35% think it will remain unchanged, and 23% think the industry situation will get worse this year.
Economic Perspective | 27.07.2022
(comprehensive report)
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2024-01-25 17:15:11
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