Leading the way: People look at a Ford Explorer SUV displayed at the CIIE in Shanghai. China has emerged as a global leader in smart and electric vehicle development. — Reuters
SHANGHAI: As the new energy vehicle (NEV) boom continues in China, global players in related sectors are eyeing a vast array of opportunities and are exerting efforts to tap into this promising market.
At the 2024 edition of the China International Import Expo (CIIE), held from Nov 5 to Nov 10 in Shanghai, the trend is obvious – with innovation, openness and cooperation proving to be buzzwords at the trade emporium.
Focusing on sustainability and future mobility, the vehicle category at the expo featured 12 Fortune 500 automakers.
Nearly 90% of all brands on display showcased NEV models, and the use of recyclable and bio-based materials was increasingly common.
At Toyota’s display, two Crown sedans were prominently placed, with the model being among the Japanese auto giant’s top sellers.
One of the sedans was a 1964 model, marking the company’s first entry into the Chinese mainland, while the other was the latest intelligent hybrid version, a testament to advancements in NEV technologies that have benefited the brand’s growth and followed the trend in the Chinese market.
The two models, six decades apart, symbolise Toyota’s long-term growth in China.
“China is now not only the world’s largest automotive market in terms of volume, but also a global leader in smart and electric vehicle development,” said Xu Yiming, Toyota’s head for brand and communications in China.
According to official data, NEV market share in China was just above 1% in 2015, but has since surged thanks to an expedited green transition of the Chinese economy.
In July this year, NEVs made history by surpassing fuel-powered vehicles for the first time in terms of market share, with retail sales nationwide hitting 878,000 units – accounting for 51.1% of total Chinese auto sales during the period.
To leverage NEV-related innovations achieved in China, including some of the highest levels of advancement seen anywhere in the world, Toyota has established one of its largest overseas testing and research and development centres in Changshu, Jiangsu province, and recently opened an advanced technology research centre in Shanghai.
“Looking ahead, especially in the fields of electrification and smart technology, our focus is shifting toward research and development (R&D) based in China,” said Xu.
A few steps from the two Crown sedans was another eye-catching exhibit surrounded by visitors and professional buyers – a concept electric car in the form of a robotaxi, codeveloped by Toyota and Chinese autonomous driving company Pony.ai.
Featuring a collision-avoidance system developed using data from 20 billion km of assisted driving, the new vehicle is aimed at upscaling and commercialising fully autonomous solutions.
“We aim for the technologies developed in China to influence our R&D approach worldwide, enhancing products and technologies that can be applied across global markets,” said Xu.
Besides world-renowned original equipment manufacturers, many auto parts suppliers are also eager to try their luck amid China’s NEV drive.
Aptiv, a multinational developing automobile parts, made its debut appearance at the seventh CIIE, showcasing software and hardware products developed by local teams for the local market, with two themes in accordance with the market’s trend - intelligence and electrification.
As a newcomer to the CIIE, Aptiv flexed its tech muscle via its unique strength involving both the “brain and the nervous system” of a vehicle, providing advanced solutions to software-defined and electrified vehicles.
Highlighting the opportunities they managed to sniff out in the Chinese market, Jiang Weihao, an engineer with the company, said Aptiv chose to base operations in China to stay closely aligned with the requirements of automakers in the world’s largest auto market.
“China’s manufacturing sector has matured significantly, providing a strong foundation for us to develop solutions that are cost-effective, reliable and tailored,” Jiang said, adding that several exhibits and technologies were launched for the first time at this year’s CIIE.
Despite rosy prospects, the Chinese NEV sector still faces headwinds due to trade protectionism.
The United States and the European Union have this year both unveiled exorbitant additional tariffs on Chinese electric vehicles.
At the 2024 CIIE, a major event based on openness, many industry insiders voiced concerns about such protectionist moves, while praising China’s opening-up measures.
Trade protectionism disrupts international cooperation and technological progress in the automotive industry, impacting negatively on efforts in green transition and climate change collaboration, said vice-commerce Minister Ling Ji at a sub-forum held along with the CIIE.
“Development and technological progress of the NEV industry both rely on international cooperation.
“Regardless of external protectionist pressures, China will remain steadfast in its commitment to openness and collaboration,” Ling said.
Taking the development of China’s auto industry as an example, Yin Tongyue, chairman of Chinese automaker Chery, said that when global players Ford, Volkswagen and Toyota entered the Chinese market, they didn’t push Chinese automakers out. Instead, they energised them.
“Now, as China advances in electrification and smart technologies, we may be leading in certain areas, and it’s our turn to energise others, supporting their healthy growth and smooth transition to electrification,” Yin added.
Notably, China caters to its domestic market and China’s NEV exports constitute a small portion of its total production.
While approximately 9.59 million NEVs were manufactured in the country last year, only about 12% of them were exported.
Adding to the discussion, Ralph Ossa, chief economist of the World Trade Organisation, said trade tensions and conflicts have emerged, not only concerning trade, but also in areas like the green economy, environmental protection and energy conservation.
Ossa also said that naturally, no one wants to see such tensions arise.
“International trade is an important part of the solution to climate change. The share of electric vehicles in total car imports was only about 5% in 2017. Now it is much higher,” Ossa said. “And of course, China is an important part of the story.”
Successful collaboration lies in finding synergy and sustainability, and cooperation and mutual benefit are advantageous for both China and the United States, said Sam Wu, president and CEO of Ford China.
“From this perspective, global automakers are eager to see China’s rapid progress in the NEV sector and are open to partnerships on a global scale,” Wu said. — Xinhua
