Chelsea_SunChelsea_Sun ・ May. 10, 2024
Foreigners Flock to Beijing Auto Show for New Chinese Deals
The presence of foreigners throughout the exhibition has turned this year's Beijing Auto Show from a domestic event to an international one.

AsianFin--"At this year's Beijing Auto Show, apart from checking out the cars, the biggest attraction was observing the people, especially foreigners. You could bump into several waves of overseas visitor groups at the show," a person who just attended the Beijing Auto Show told TMTPost.

Indeed, this has been a new feature of this year's Beijing Auto Show. Almost every corner of the exhibition was filled with foreigners.

A founder of a new energy brand told TMTPost, "Compared to last year's Shanghai Auto Show, this year's Beijing Auto Show is much livelier, mainly because of the surge in overseas participants."

According to statistics released by the Beijing Auto Show Organizing Committee, the show saw 1,148 foreign media people and 7,401 overseas dealers. Over the 10-day event, it attracted 28,000 international visitors, setting a new record.

Foreign visitors attending this year's Beijing Auto Show mainly include: executives and employees of multinational car companies, overseas dealers invited by Chinese car companies, overseas media organizations, and third-party institutions like international investment organizations.

The presence of foreigners throughout the exhibition has turned this year's Beijing Auto Show from a domestic event to an international one. On social media platforms, there are heated discussions about the "Beijing Auto Show," with some overseas media outlets describing it as "the world's largest auto show." The products and technologies showcased at the Beijing Auto Show have become a barometer for the global automotive industry.

So, why the sudden surge in foreign visitors at this year's show, and what signals does it give?

In fact, many of the foreigners at this year's Beijing Auto Show are old friends of the Chinese automotive industry—executives from foreign-funded brands. Brands including Volkswagen, Mercedes-Benz, BMW from Germany, Toyota, Honda, and Nissan from Japan, as well as Hyundai and Kia from South Korea, which are well-known to Chinese consumers, have sent large contingents of executives and employees to participate in the Beijing Auto Show.

However, in recent years, with the rapid development of electrification and intelligence, the old friends of the Chinese auto industry have come to China for a different reason.

At this year's auto show, foreign brands have shown an eagerness to learn from Chinese brands, which is no longer an isolated case but a common phenomenon. Even Japanese brands, which have been less active in electrification and intelligence, have changed their attitudes.

When Nissan executives came to China in a group, their global CEO also joined, which is unusual for Japanese car companies. Makoto Uchida, Nissan's global CEO, led the team to visit several Chinese companies' booths, including Huawei's. Speaking about his experience at the exhibition, Uchida said, "I feel the rapid changes in the automotive industry. In order to meet the needs of Chinese consumers, we need to make decisions quickly."

During the show, Nissan and Baidu reached a cooperation agreement, and the two parties will conduct a feasibility study on strategic cooperation in the field of AI and smart cars in the future, exploring the integration of Baidu's AI technology into Nissan's products and services. They also reiterated their "in China, for China" strategy.

The other two representatives of Japanese carmakers, Toyota and Honda, also showed their willingness to learn from Chinese tech companies.

Toyota announced a strategic partnership with Tencent Group at the auto show, and Tencent's advantages in AI models, cloud computing, digital ecology, and other capabilities will be reflected in Toyota cars in the future. Toyota also showcased an L4-level self-driving car developed in cooperation with Chinese unmanned driving company, and their joint venture company will be established in the near future.

Honda announced that it will use Huawei's in-car display screen system on its newly launched electric vehicle models.

From the cooperation announcements made during the Beijing Auto Show, some industry insiders believe that Japanese car brands have begun to recognize the gap and are making changes more quickly. However, the task ahead is whether they can quickly launch new energy products suitable for the Chinese market.

German companies are no exception. Coming to China in groups, including CEOs, has gradually become a tradition for German car companies.

During this year's Beijing Auto Show, executives from Volkswagen, Mercedes-Benz, and BMW all made appearances. Compared to car manufacturers from other countries and regions, German automakers have always been the most active and enthusiastic about the Chinese market. On the one hand, this is because the Chinese market is the largest overseas market for the three German companies; on the other hand, German car companies are the most closely linked foreign companies to the Chinese auto industry, and they want to maintain this tradition.

At the Beijing Auto Show, Herbert Diess, the CEO of Volkswagen Group, showcased the latest products and technologies from various subsidiaries of Volkswagen Group, such as Volkswagen, Audi, Porsche, and Lamborghini, for the Chinese market.

Before the auto show, Volkswagen and XPeng reached another cooperation agreement, under which they will work together to develop a new electronic and electrical architecture—CEA (China Electrical Architecture) to be installed in Volkswagen brand models. Volkswagen hopes to improve its position in the Chinese market with the assistance of its Chinese partners.

Oliver Zipse, the CEO of BMW Group, visited China for a second time within ten days, indicating BMW's optimism about the Chinese market. During the auto Show, BMW announced an additional investment of 20 billion RMB in China to further deepen its presence in the Chinese market.

Mercedes-Benz Group, on the eve of the show, showcased the electric EQG for the first time to Chinese consumers to demonstrate its determination for full electrification. Previously, there were rumors that Mercedes-Benz would abandon electrification. Mercedes-Benz refuted these rumors during the show and put electric vehicles in a prominent position at the exhibition.

Renault Group, which withdrew from the Chinese market with its joint venture, showcased its plans to re-enter the market at this year's auto show. Renault executives said they had discussions on smart electric vehicle technology cooperation with NIO and Xiaomi.

Renault had previously cooperated with Geely on hybrid cars. Its CEO, Luca de Meo, said European car manufacturers need to learn from Chinese car companies, which are far ahead in electric vehicle and software development.

It can be seen that at this year's Beijing Auto Show, Japanese and German car brands were the most active, seeking to establish new partnerships in China and hoping to catch up in the electrification lane.

For this reason, they sent a large number of executives to negotiate with Chinese partners for more cooperation by participating in the Beijing Auto Show. A supplier executive told TMTPost that European car companies sent more senior executives to this year's Beijing Auto Show, all of whom came with a mission.

Huang Hongsheng, the founder of Skyworth Auto, told TMTPost that Chinese new energy vehicles have become a global hotspot, and the influx of many foreigners into the show indicates that many foreigners want to seize the opportunity to cooperate with Chinese peers.

This is particularly evident at the booths of Chinese brands.

At the Lynk & Co booth, a foreigner was squatting down to measure the rear of the displayed car with a tape measure and recording the design details of the vehicle with his phone. At the BYD booth, a Japanese visitor even squatted down to carefully inspect the chassis of a Qin PLUS DM-i, measuring the size of the wheels with a tape measure and recording the measured data on his phone. A booth staff member said such scenes were common every day.

Staff at the Hongqi booth also told TMTPost that there were unusually many foreigners at their booth this year. Some were invited to attend press conferences, while others specifically came to see the cars.

"These foreigners are very careful in examining the cars, experiencing both the appearance and interior, and then sharing their experiences with each other," the staff member said, adding that  many of these foreigners were overseas dealers invited by Chinese brands. On the first day of the auto show, 7,401 overseas dealers flocked in, with half of them invited by Chery and Great Wall Motors. Chery invited 3,000 overseas dealers, while Great Wall Motors over 800 overseas dealers from their key markets.

A foreigner who came to the Chery booth to observe and learn told TMTPost that Chery is very popular in their country, and local dealers are eager to seek a distributorship. He came here this time to deepen cooperation with Chery and sell more Chery cars in his own country.

The overseas market has become a strategic market for Chery. Data shows that in 2023, Chery Group's sales exceeded 1.88 million units, with exports exceeding 900,000 units, accounting for nearly half. Chery has ranked first among Chinese passenger car exports for 21 consecutive years. From January to April this year, Chery Group exported 342,795 vehicles, a year-on-year increase of 34.2%, maintaining its position as the top exporter of Chinese automobiles. The latest data shows that one out of every three passenger cars exported from China is a Chery.

Wang Chuanfu, the Chairman of BYD, paid a visit to the Chery booth during the auto show. He told Chery Holdings Group Chairman Yin Tongyue, "We need to learn from Chery … We are a family."

These two fellow Anhui natives both view the overseas market as a pivotal one. In April of this year, BYD's overseas sales reached 41,000 units, a year-on-year increase of 176.6%, and the cumulative sales in the first four months reached 138,900 units, in a period of high-speed growth.

Another Chinese brand that views the overseas market as strategic is Great Wall Motors. On the first day of the auto show, Great Wall Motors invited over 1,000 overseas guests to visit China.

Mu Feng, the President of Great Wall Motors, told TMTPost that the composition of these guests is quite diverse. Most of them are core dealers from the top ten regions, with some overseas user representatives, as well as some embassy officials. In addition, more than 200 overseas media were also invited.

Great Wall Motors announced its overseas strategy focusing on "ecology going global" at the exhibition and shouted the slogan "where the market is, there our factory is," igniting the enthusiasm of the audience.

Mu said that the internationalization of Chinese automobiles is a natural progression given the current position of China's automobile industry chain, scale, and level in the world. However, he also pointed out that when Chinese cars go overseas, they must adhere to long-termism and must not harm the brand for short-term interests. The correct approach is to go overseas with marketing system ecology, automotive peripheral ecology, technology ecology, and industrial chain ecology all in place. Only by focusing on local users, adhering to delivering value to local consumers, can we achieve sustainable development overseas.

Hao Jingxian, the General Manager of SAIC Maxus, also told TMTPost that there are indeed many opportunities in the overseas market now, but there are also many challenges. Firstly, the sales models must comply with global regulations, and some countries also have requirements for carbon emissions. For example, the UK requires that the proportion of new energy vehicles' sales must exceed 22%, otherwise they will face significant penalties or fines. They need to meet stringent safety regulations, achieve carbon emission standards, and meet the habits of users in different countries.

High overseas sales share is also a trait of SAIC Maxus' sales structure. In 2023, SAIC Maxus' annual sales reached 204,000 units, a year-on-year increase of 7%, of which overseas sales reached 96,000 units, accounting for 47.1%. SAIC Maxus' goal is to achieve a proportion of overseas sales of over half as soon as possible.

The booths of Chinese brands such as SAIC Motor, Xiaomi Auto, Harmony lntelligent Mobility Alliance, NIO, XPeng Motor, and Leapmotor were also crowded with foreigners.

Leapmotor's overseas ally Stellantis Group witnessed the global debut and pre-sale of the C16, Leapmotor told TMTPost that more than 100 overseas visitor groups from Europe, Asia-Pacific, South America, and other places came to the Leapmotor booth, and heavyweight guests included Xavier Horent, the National Representative of the French Automobile Industry Council, Luc Chatel, the Chairman of the French Automobile Industry Alliance, and Francis Bartholome, the President of the French Automobile Distributors Association.

A foreign guest who experienced the latest ET7 executive sedan introduced by NIO at the booth said, "If you come here, you won't have any doubts about electric cars. Here, you can meet any need you have for electric cars."

Some foreign investors even said that as Chinese brands become increasingly prominent in the electric vehicle market, Chinese cars hitting the roads of the world will become a new trend.

Public data shows that the number of exhibitors at this year's Beijing Auto Show reached 1,500, an increase of 114% over the previous session. The number of new energy vehicles increased by 74% from the previous session to 278 models.

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