Despite increasing calls in Europe for an economic decoupling from China amid rising geopolitical conflict, Volkswagen and BMW have committed to long-term development in China and will continue to invest in the world’s biggest car market, according to senior executives from the German automakers.

Why it matters: The remarks come as German Chancellor Olaf Scholz visited China on Nov. 4 with a group of top business leaders, including Volkswagen’s chief executive officer Oliver Blume.

  • BMW’s CEO Oliver Zipse was also among the group of business executives who joined Scholz’s inaugural trip to China, noting in a statement that the visit sent “a strong signal towards reinforcing economic cooperation between China and Germany.”

Details: “China has established one of the world’s most comprehensive industrial bases and supply chains… and will remain one of our most strategically important markets,” Zipse said, adding that the German carmaker will stay “unwaveringly committed” to the Chinese market.

  • BMW has also been lobbying the US government to ease up its climate legislation, including a rule that would exclude a $7,500 consumer tax credit to EVs using battery materials sourced from China, Bloomberg reported on Oct. 19.
  • Volkswagen’s China chief Ralf Brandstaetter also publicly voiced support for Berlin reinforcing business ties with Beijing. “I think it’s very important that we stay in touch at all levels. This is especially true in politically and economically challenging times like these,” he wrote on LinkedIn.
  • Volkswagen’s Blume had described the visit as an important chance to “build our own perspective in this discussion with the Chinese government” during an earnings call on Oct. 28. The auto giant recently announced a $2.4 billion investment plan to form a software venture with a Chinese partner.

Context: China has been Germany’s biggest trading partner over the past six years, with bilateral trade reaching a combined 245 billion euros ($242 billion) in 2021, according to official statistics. China accounted for more than a third of Volkswagen and BMW’s annual sales last year.

  • Scholz became the first G7 national leader to visit China in the past three years and has faced intensified criticism over German industries’ over-dependence on China.
  • Other German business leaders joining the official delegation included the CEOs of chemicals giant Basf, technology company Siemens, and Deutsche Bank.

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen