The Volkswagen Group’s surprise announcement in July that it would invest in Xpeng is symptomatic of the shift in relationships between western car makers in China and their once junior Chinese partners.
When foreign firms first accepted China’s ruling that they must form joint ventures (JVs) with local companies in order to gain access to what’s now the world’s largest car market, the relationship was one of master and pupil. Increasingly, however, the roles have shifted as Chinese firms’ speeds of vehicle development – especially on software and batteries – have outpaced those of their one-time superiors.
Those global firms with sizeable markets to protect in China are increasingly admitting that they need to join forces with local players or face losing even more market share than they already are, especially if it’s the cut-throat volume market they’re playing in.
“There seems to be something a pivot going on in the industry, where there’s a willingness to work with competitors,” Adam…