German companies eye China's expanding NEV sector

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【Summary】German enterprises are increasingly investing in China's new energy vehicle (NEV) market, driven by the country's large population and the significant growth in NEV production and sales. Hefei, in Anhui Province, is emerging as an important NEV industrial cluster, attracting companies like Volkswagen and Continental.

FutureCar Staff Aug 27, 2023 4:18 PM PT

German companies eye China's expanding NEV sector

German enterprises are increasing their investment in China's new energy vehicle (NEV) industry to take advantage of the market potential in the country, which has a population of 1.4 billion. This year, China has experienced a significant growth in NEV production and sales, with output reaching 4.59 million units and sales reaching 4.53 million units during the first seven months. Hefei, the capital of Anhui Province, is home to several NEV enterprises and is working to establish itself as an important NEV industrial cluster in China and the world.

Volkswagen Anhui, a majority-owned joint venture of Volkswagen Group for all-electric vehicles in China, is playing a key role in the company's e-mobility push and decarbonization strategy. With a planned investment of 23.1 billion yuan, Volkswagen Anhui is building a new NEV hub in Hefei, covering R&D, manufacturing, sales, and services. The company is also collaborating with Hefei University and the local government to train high-skilled NEV professionals through Volkswagen College. In addition, Volkswagen Group has reached an agreement to acquire a 4.99% stake in Chinese NEV startup Xpeng and co-develop two NEV models for the Chinese market.

Continental AG, a leading tire manufacturer, is also expanding its presence in Hefei. The company plans to accelerate the construction of its tire factory and explore follow-up projects such as auto electronics and R&D centers. Continental AG has been operating in Hefei since 2011 and has achieved significant production output. Other German companies, including BMW and Mercedes-Benz, have also shown interest in investing in Anhui.

Germany and China have a strong trade relationship, with China being Germany's largest trading partner for seven years. The China-Germany Friendship Association is actively promoting cooperation between German enterprises and Anhui in various areas, including NEV, vocational education, and youth exchanges. The collaboration between Germany and China offers benefits in terms of market access, technology innovation, and talent cultivation.