AutoBeta(AutoBeta.net)11/05 Report--

On November 4, Chinese President Xi Jinping met with German Chancellor Gerhard Schultz, who is on an official visit to China, at the Great Hall of the people. It is worth mentioning that Schultz led a business delegation to China, including BMW Group Chairman Ziptzer and Volkswagen Group CEO Obermu.

We have to admit that Volkswagen and BMW are more and more dependent on China and pay more and more attention to China.

According to the data, Volkswagen's global sales fell 6 per cent year-on-year to 8.58 million vehicles in 2021, including a 14 per cent year-on-year decline to 3.3 million vehicles in China, the world's largest single market, with a 38 per cent market share. This means that for every 100 Volkswagen models sold in the world, 38 of them are from the Chinese market.

In addition, as the profit cow of Volkswagen Group, the Chinese market is also the largest single market for Porsche and Audi. According to the data, Porsche sold 301915 vehicles worldwide in 2021, of which 95671 were sold in China, making it the world's largest single market for the seventh consecutive year, with a market share of 32.8%. Audi sold 1680512 vehicles worldwide in 2021, of which 701289 were sold in China, which accounted for 41.7 per cent of the total global market.

Affected by the epidemic and spare parts supply, Volkswagen sold 2.3588 million vehicles in China in the first three quarters of 2022, down 7.5 per cent from a year earlier. However, Volkswagen's concern is not that sales are falling, but that it is electrified and intelligent. At present, new energy vehicles are the main battlefield of China's auto market, while Volkswagen's current report card is far from keeping up with its ambitions. In 2021, for example, Volkswagen delivered 369000 new energy vehicles worldwide, of which 93000 were delivered in China, lagging far behind Tesla and BYD.

At present, the main electric vehicles launched by Volkswagen Group in China include ID.3, ID.4 and ID.6, but the market performance can only be said to be satisfactory. In the first three quarters of 2022, FAW-Volkswagen sold 73564 new energy vehicles, while SAIC-Volkswagen sold 65573 vehicles, ranking 14th and 15th on the list, according to FIFA data. In terms of specific models, only ID.4 CROZZ appeared on the list in the first three quarters, ranking 13th with sales of 35388 vehicles, while Tesla's Model Y sales reached 219112, while new power models such as Zero running C11, Lilai ES6, ideal ONE and other new power models from the new power are also ahead of it. It can be said that Volkswagen still has a lot of deficiencies before Tesla and its own brand.

"We are the best in the world of internal combustion engines, but in the new world we call NEW AUTO, what awaits us is a war we have never experienced before," said former Volkswagen Group CEO Deiss. Indeed, in the wave of great changes in the automobile industry, Volkswagen still needs to make changes if it wants to catch up with Tesla and the new power in China.

To strengthen local R & D capabilities, CARIAD, a software company owned by Volkswagen Group, announced that it will invest about 2.4 billion euros (16.8 billion yuan) in a joint venture with Horizon to speed up the development of advanced driving assistance systems and self-driving systems for the Chinese market. "this is the largest single investment since Volkswagen entered China 40 years ago," said Baird, CEO of Volkswagen Group (China). It said that China is the group's most important business region in the world, and the cooperation with Horizon is the core cornerstone of the group's strategic transformation in China and strengthening its business in China. Local R & D will give the group more autonomy and further consolidate its leading position in the Chinese auto market.

Also valuing the Chinese market is BMW. Data show that BMW Group sold a total of 2213795 vehicles worldwide in 2021, an increase of 9.1% over the same period last year. This result is the best sales year in the group's history, of which 846237 cars are delivered in the Chinese market, which accounts for 38.2% of the total global sales. It is the BMW Group's largest single market in the world.

In the internationalization strategy of BMW Group, the Chinese market occupies a very important position. In April 1994, BMW Group opened a Beijing representative office, marking BMW's official entry into the Chinese mainland market. In March 2003, BMW Group and brilliance Group signed a joint venture agreement to establish brilliance BMW Co., Ltd., each holding 50%. At present, BMW Shenyang production base has developed into the largest production base of BMW Group in the world, with two vehicle factories, an engine factory, a high voltage battery production line and a research and development center.

On June 23, BMW Group officially opened its third vehicle factory in Shenyang, brilliance BMIDA plant, with a total investment of 15 billion yuan, which is BMW's largest investment project in the Chinese market. Shenyang has also become the largest production base of BMW in the world, mainly producing a variety of new energy models, including BMW i3.

In addition, according to foreign media reports, BMW Group will stop producing electric MINI models at its plant in Oxford, UK, and will be replaced by Beamlight cars, a joint venture between BMW Group and Great Wall Motors. BMW China responded that it would suspend the production of electric models at its plant in Oxford, but not the MINI, and made it clear that the beam car, which is working with Great Wall, would produce an all-electric MINI.

Data show that Light Motor was founded on December 27, 2019, and its registered address is Zhangjiagang Economic and technological Development Zone, Zhangjiagang City, Jiangsu Province. Equity penetration shows that Great Wall Motor Co., Ltd. and BMW (Holland) Holdings each own 50% of the joint venture, of which BMW (Holland) Holdings is the actual controller. It is understood that Beam Automobile is the first joint venture project of Great Wall Motor, and it is also the first pure electric vehicle joint venture project of BMW in Germany. The cooperation mode of the two sides adopts the mode of "joint venture without joint venture" for the first time, that is, jointly develop and produce automobiles, but the products will be sold in the respective service networks of BMW Group and Great Wall Motor respectively by brand.

According to the latest report released by overseas research institute Rhodium, the automobile industry has accounted for about 1/3 of all European direct investment in China in the past two years, with Volkswagen, BMW and Mercedes-Benz, as well as the chemical group BASF Group, leading the investment in China.

With a comprehensive industrial system, supply chain and talent pool, China is a global driver in many ways, such as digitization, electrification and sustainability at the heart of BMW's strategy, Mr Chipze said. China will remain one of the most strategic markets for BMW Group. He believes that the commercial and trade relations between Germany and China will be a bridge for the development of bilateral relations between the two countries in the future. Recently, the Chinese government has made encouraging statements about continuing to promote a high level of opening up to the outside world, attracting foreign investment and persisting in innovation. We are optimistic about the medium-and long-term development prospects of the Chinese market. BMW Group will continue to deepen cooperation with Chinese enterprises, make common progress with China, promote high-quality development and create win-win results. "

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