German auto executives call for deeper cooperation with China on NEVs

German automakers are not merely adapting to China; they are integrating China into their core R&D. Volkswagen’s shift from "from Europe, for China" to "in China, beyond China" reflects this. Its VCTC in Hefei, a 3.5 billion euro investment, is now its largest R&D center outside Germany. This development signifies a fundamental change in how global auto innovation will flow, with China as a development hub, not just a market.

This deep integration offers a direct challenge to other Asian automotive players. Volkswagen and Mercedes-Benz are leveraging China's speed and digital ecosystem for next-generation NEV technologies. This could accelerate their market penetration in Southeast Asia and India, where Chinese domestic brands already compete fiercely. The test for Japanese and Korean automakers is whether they can match this co-creation model or risk falling behind.

The focus on "co-creation" over mere collaboration is critical. Mercedes-Benz is applying AI across its value chain and working with Tsinghua University on autonomous driving. The thing to watch is whether this leads to genuinely joint IP or if German brands retain primary ownership. Joint IP would reshape global automotive innovation permanently.