Europe's car industry shifts gears to catch Chinese innovation
European car manufacturers are beginning to view the achievements of their Chinese competitors with some envy. Although the automotive industry is one of the most significant sectors in the Union, it is now keen to take note of the technological advancements found in China and is attempting to gain access to them, reports the "Financial Times".
Two decades ago, German engineers joked among themselves about Chinese car manufacturers as they primarily replicated European designs. However, the roles have now reversed, according to the "Financial Times". The newspaper states that an engineer from one of the major German automotive firms has received directives from management regarding a new operating system intended for the company's future vehicles. The company aims to adopt the same solutions used in Chinese cars.
"We have come full circle," comments the engineer, who wishes to remain anonymous. The "FT" highlights that the EU automotive industry has already felt the impact from China, as government-supported Chinese companies have made a significant entry into the EU market with their electric vehicles. Now both the European Commission and individual EU manufacturers are taking measures to avoid falling completely behind. According to the British newspaper, European companies are increasingly forming agreements with their Chinese rivals to gain access to technology. Volkswagen, Mercedes-Benz, Stellantis, and BMW have already taken this step.
Meanwhile, the action plan for the industry published last month by the European Commission suggests that the Commission intends 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 adds that this situation confirms a significant gap between the competencies of European companies and the capabilities of competitors 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 capabilities while downplaying those of others. He stresses the importance of recognising the current situation with greater clarity.
