China, Europe develop stronger auto industry ties

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

The auto parts factory, which belongs to Gestamp — a Spanish firm specializing in the design, development and manufacture of precision metal components — is one among many auto parts suppliers surrounding the plant, located in Shenyang, capital of 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.

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

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

Gestamp, which began operations in China in 2007, now operates 14 factories and two research and development centers, employing 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 ... chassis, battery box technologies and products to China."

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

In April 2024, BMW announced an additional investment of 20 billion yuan ($2.77 billion) in its production base in Shenyang to localize the manufacture of a new generation of BMW models by 2026. Volkswagen AG established its largest R&D center outside of Germany in China, focusing on the development of intelligent networked vehicles.

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. The China Association of Automobile Manufacturers said that in the first half, NEV production and sales in the country had reached 4.93 million units and 4.94 million units, respectively, marking year-on-year increases of 30.1 percent and 32 percent.

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

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

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