By Li Panpan
(JW Insights) Jul 25 -- German auto suppliers are turning to Chinese OEMs to reduce dependence on local manufacturers who are losing market share due to the strengthening of Chinese manufacturers, reported German news outlet Handelsblatt on July 20.
There was one thing German automotive suppliers could always rely on, which was the technological leadership of their most important customers. From the ABS anti-lock braking system to electronic engine management - BMW, Mercedes, and the VW Group have always been the first in the industry. But that's apparently over.
"Chinese car manufacturers are extremely tech-savvy, despite their high development speed, and use new technologies earlier than others," said German ZF board member Stephan von Schuckmann. What many in the industry see as a threat is an opportunity for the ZF manager. "We are already industrializing a large number of our new developments, first in China and only then in Europe."
The Chinese carmaker Nio was the launch customer for ZF's electronic steering, reported Handelsblatt. ZF is installing its 800-volt power electronics for fast charging in top models from Chinese carmakers.
The number of orders from Chinese automakers for Bosch, Continental, and ZF are said to be increasing significantly year on year. Almost everything that the German suppliers have developed is supplied. Nio buys battery management systems, rotors for its electric motor, and various control units from Bosch. Xpeng bought electric steering.
Among other things, Continental is supplying a break-by-wire solution for Leapmotor. It also announced having received two orders for high-performance computers from Chinese manufacturers.
The growth momentum of Chinese manufacturers in the order portfolio is now higher than that of Volkswagen, BMW, and Mercedes, said a manager of a large German supplier.
The result is that the Chinese suppliers are bringing out cars that are technologically equivalent to the market and will be significantly cheaper than their German competitors.
"With Chinese electric cars that cost over 100,000 euros ($110672.50), you will hardly recognize that it is a non-European vehicle," says Harald Marquardt, head of the southern German auto supplier of the same name.
Even Bosch boss Stefan Hartung makes no secret of the fact that the Chinese are welcome to the world's largest automotive supplier in his home country: "Competition is always good and improves what's on offer. This also applies to Chinese car manufacturers when they come to the German and European market with their electric models." For Bosch, all car manufacturers are basically potential customers, "especially if they appreciate our innovations."
In any case, Bosch, ZF, and Continental do not want one thing in the transformation: going to ruin the German auto industry. While German car manufacturers are losing market share due to the strengthening of Chinese manufacturers, this development can therefore be an opportunity for suppliers to reduce their dependence on domestic manufacturers, said the Handelsblatt report.
