Europe's auto giants shift gears, eye Chinese tech advances
European car manufacturers are starting to look with envy at the achievements of their competitors from China. Although the auto industry is one of the most significant in the Union, it is now keen to take note of the technological solutions used in China and is trying to access them, writes the "Financial Times."
Two decades ago, German engineers in the auto industry joked among themselves about Chinese car manufacturers because they primarily copied European solutions in their designs. However, now the roles have reversed, reports the "Financial Times." According to the newspaper, an engineer working for one of the German automotive giants received guidelines from management regarding a new operating system that is to appear in the company's future cars. The manufacturer desires exactly the same solutions as those used in Chinese vehicles.
"We have come full circle," comments the engineer, who wishes to remain anonymous. The "FT" points out that the EU automotive industry has already taken a hit from China, as government-subsidized Chinese companies have entered the European Union market with their electric cars. Now both the European Commission and individual EU manufacturers are taking steps to avoid being left completely behind. According to the British newspaper, European companies are increasingly entering into agreements with Chinese rivals to access technology. Volkswagen, Mercedes-Benz, Stellantis, and BMW have already decided to take this step.
Meanwhile, the action plan for the industry published last month by the European Commission indicates that the Commission wants to require Chinese companies entering the EU automotive market to form joint ventures with European firms or license part of their technology.
"Turning point"
According to the "Financial Times", if these initiatives succeed, they could mark a significant shift in the trajectory of recent economic history. While China has spent the last forty years using its market access as leverage to extract technology and expertise from foreign firms—much to the dismay of investors—Europe is now attempting to adopt comparable tactics in an effort to bridge the innovation gap with China.
Elisabetta Cornago from the Centre for European Reform notes that this represents a change in approach, as it opens the door to foreign investment in a sector once considered a cornerstone of European industrial achievement. She also adds that this situation confirms that there is a large gap between the competencies of European companies and the capabilities of players from other parts of the world.
Robert Falck, founder and CEO of the Swedish startup Einride, believes that there is a tendency to overrate one’s own capabilities while downplaying those of others. He stresses the importance of recognizing the current situation with greater clarity.
