International car manufacturers adopt domestic technology in China

The global automotive industry is witnessing a seismic shift as major car manufacturers from South Korea and Japan are turning to Chinese-made technology to stay competitive in the cut-throat market. Following in the footsteps of Germany’s Volkswagen, Toyota, Nissan, and Hyundai have all announced strategic partnerships with Chinese tech giants to incorporate advanced technologies in their vehicles.

At the Beijing auto show, Toyota unveiled a partnership with Tencent to develop services for Chinese customers using artificial intelligence and cloud-based software. Similarly, Nissan announced a collaboration with Baidu to integrate generative AI in its vehicles. Hyundai, facing declining sales in China, decided to work with CATL to develop batteries for electric vehicles, snubbing its South Korean supplier SK On.

Analysts and industry executives believe that to catch up with Chinese carmakers, who have been leading the way in electric vehicles and advanced technologies, multinational companies must integrate Chinese tech into their models. This shift comes as foreign carmakers’ market share in China hit a record low of 40%, with sales of pure EVs and plug-in hybrids surpassing traditional vehicles for the first time.

As China emerges as a technology hub for the automotive industry, foreign companies are racing to collaborate with Chinese tech firms to stay relevant in the rapidly evolving market. With China’s focus on electric-powered vehicles and smart features, multinational carmakers are reinventing their business models to keep pace with domestic groups. The future of the global car market seems to be increasingly intertwined with Chinese technology, raising questions and challenges for foreign companies in their home markets.