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German Chancellor Schultz announced an incentive plan to promote "made in Germany" sustainable innovation at the 2023 Munich Auto Show on Sept. 5, to encourage German car companies to face the development pressure of China's emerging markets.

Referring to the impact of Chinese car companies on the German market, Schultz said, "Competition should inspire us, not be scared." There is no doubt about Germany's international competitiveness as an automobile power. I can hardly think of any other place in the world with so much car manufacturing technology, so many suppliers and automakers. " He points out that the German car industry has faced competition from Japan and South Korea over the past few decades; now, electric cars from China will also provide "innovation drivers" for German carmakers.

To this end, Schultz announced at the auto show an incentive program aimed at promoting sustainable innovation of "made in Germany". The federal government will invest more than 110 billion euros to promote German industrial modernization and climate protection. including accelerating investment in strategically important areas such as charging infrastructure, renewable energy and batteries to support the development of the German electric vehicle industry.

Mr Schultz's comments come at a time of "anxiety" among carmakers in Germany and across Europe.

IAA Mobility (IAA), the predecessor of the century-old Frankfurt Motor Show, founded in 1897, is one of the five major auto shows in the world and one of the largest international auto shows in Europe, playing a key role in the development of the global automobile industry. In 2021, the host site of IAA moved from Frankfurt to Munich, the first major fair in Germany since the outbreak, held every two years.

The 2023 Munich Motor Show opened on September 3rd. Although German local car companies such as Mercedes-Benz, BMW, Audi and Volkswagen are still the protagonists of this auto show, non-local car companies, including Toyota, Honda, Nissan, General Motors, and enterprises, are all absent, while the participation of Chinese local car companies is more like the key to the popularity of the Munich auto show. According to German media reports, about 40% of the manufacturers who came to participate in the auto show were from China, including BYD, Xiaopeng Automobile, Zero car, Avita Technology and so on. Some media commented on this, "without the participation of Chinese auto companies, the Munich auto show may have to stop eating."

In the past two decades, German manufacturing has been regarded as a cutting-edge technology symbol of the automotive industry, giving birth to world-class automobile brands, including Mercedes-Benz, BMW, Audi, Volkswagen, Porsche and so on. However, with the backwardness in the transformation of the new four modernizations, these once proud world-class automobile brands began to feel the development pressure from Chinese automobile brands.

At this year's Munich Auto Show, the BYD booth was packed, and almost all the German car companies present felt threatened, and according to the media, most of the people who visited the BYD booth came from insiders of local car companies. feel BYD's products closely, but more about how BYD can quickly become a market hegemon in a short period of time, and how to restore the dignity of local German companies as much as possible. It is understood that in less than a year, BYD has launched six models in Europe and entered 15 European countries.

In July this year, Volkswagen announced that it had reached a strategic cooperation with Xiaopeng Motor. Xiaopeng Motor had a hot momentum at the Munich auto show, which announced that it would officially launch in Germany next year. Another Chinese electric car company, Avita Technology, also packed the audience, and its second production car, the Avita 12, chose to make its debut at the Munich auto show.

During the auto show, people in charge of Volkswagen, Renault, BMW and other auto companies expressed their views one after another. Gilles Le Borgne, head of engineering at Renault Group, said Renault was unable to participate in the ongoing price war with Tesla and Chinese companies. Oliver Zipse, chairman and chief executive of BMW Group, said that the EU policy of banning internal combustion engine cars has prompted traditional car brands to compete directly with Chinese brands, but it may be difficult for traditional brands to gain an advantage.

If the 2023 Shanghai Auto Show is the last journey of new energy vehicles to fuel vehicles, new energy vehicles have also begun to seize the market share of fuel vehicles, and joint venture brands and multinational car companies are losing their dominance in the Chinese market. then the Munich auto show is a more profound interpretation of the impact and threat of Chinese auto brands to overseas auto companies, sounding the alarm for overseas auto executives. It also makes it more clear to the world that Chinese electric cars are unstoppable and are leading the future development trend of cars.

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