Speed is key if Continental and its auto clients are to have any hope of defending their market share in China, given the competition they face. Auto suppliers might be used to providing very specific solutions for single customers in Europe, “but in China this is not a good idea,” said Frank Petznick, Executive Vice President of the Autonomous Mobility Business Area at Continental AG.

While foreign auto executives express nervousness about the rise of their Chinese rivals, Continental’s global mobility head says he is not surprised. He says he has been “pretty aware of” of the pace of China’s progress in electric vehicle technology for a long time.

Offering products ranging from tires to dashboard displays, Continental is now growing its business in high-performance computers for automated driving, with GAC’s Hyper GT luxury coupe one of its early adopters. Speaking on April 19 on the sidelines of the Auto Shanghai show, Petznick told TechNode that companies must be lean, localized, and standardized in developing technology for the world’s biggest and most vibrant auto market.

Having lived in China for a decade before the Covid-19 outbreak, he also gave a broader perspective on the Chinese autonomous car industry and competition between global Tier-1 suppliers and local tech companies. The German auto parts giant is pushing to develop advanced electric and connected solutions not only for the China operations of multinational car majors but also for local manufacturers with global ambition.

READ MORE: Baidu and Huawei take on global giants with new in-car software offerings at Auto Shanghai 2023

Below are Petznick’s comments on the rapidly changing Chinese auto industry. The text has been condensed and edited for clarity.

China speed

The Chinese market is working completely differently from Europe, and much faster. In order to be prepared for the market, we need local companies that can put pressure on us to speed up and become more dynamic in the market. That’s why we decided to form a joint venture with Horizon Robotics two years ago. We wanted to make a Chinese joint venture that would be closer to the local market.

Global automakers underestimated China’s speed [with regard to EV transition] over the last three years, but now they are getting super nervous because they have seen what’s going on. EV companies in China have a higher demand for autonomous driving. They integrate the entire technology into their cars and can sell to local young people who just want to buy fancy cars.

A lot of the cost of ADAS [Advanced Driver Assistance System] comes from developing specific software, and what Continental can do very well is integration. We figure out what is a common part, roll out standard components in a fast and cost-competitive way, and then add specific functions to make a difference. I think this is the key [to success] in China, but many Western companies have not understood that yet.

Think local

We are working closely with our Chinese customers and developing systems in China and for China. Global automakers in China also want to use local solutions because they are afraid of being too slow and too late. The other thing is that many Chinese brands are going global very fast. It means we could also help some of our Chinese customers use a more global approach.

Every Chinese brand now has a global ambition, though new OEMs [original equipment manufacturers] are much faster at going global than traditional ones. Since the border opened [late last year], we have seen a growing number of Chinese OEMs coming to our headquarters in Frankfurt and Hanover to talk about having a global setup. In the meantime, we have the same discussions when we come here.

We have different solutions for different regions, but the software and functions are the same. We would like to help the global OEMs develop in China and help local OEMs develop in the global world. This is what we are trying to do: bridge the two.

Mobility new energy vehicles advanced driver assistance system ADAS software auto shanghai 2023 continental
Continental showcased its full-stack assisted driving technology at Auto Shanghai 2023 on Tuesday, April 18, 2023 Credit: Continental AG

Autonomous driving

There are some very good startup players in the US, but I believe robotaxis will become real in China before the rest of the world. There are still many difficulties in getting approval for vehicles with close to Level 3 driving capabilities. Some cities have allowed this, others have not. It’s very scattered. 

I see significantly faster development in terms of the infrastructure and the regulations needed in China. That’s why I think China could be the world’s first robotaxi-friendly country. The rest of the world could focus more on commercial trucks, which are more of a highway thing and not as complicated as robotaxis in the cities.

We are developing software basically for all levels of autonomous driving by using a lot of the expertise from our partners. The competition is very tough. You always see companies jumping forward and others catching up, but the good news is that if you can survive in this market, you can survive anywhere in the world.

Competing with tech giants

Tech companies such as Huawei and Baidu are going to be Tier-1 suppliers, while we are shifting to be more on the tech side. We need to be more agile and have a more local mindset in order to be fast enough.

We have launched a couple of products, such as a full-fledged smart camera based on processors from a Chinese partner. We are also making high-performance computers where ADAS will also be a part of it. We will be going into series production with the partners we have now. You will see these cars on the road very soon.

I don’t think we have to turn ourselves into a new Baidu. This would be going too far over to the other side. Chinese tech firms are trying to be more Tier-1 and we are trying to be more like a tech company. We are basically learning from each other. We have discussed globally that we have to become a tech player, and in the China context, we need to do that tomorrow.

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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