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China's communist regime is ruthlessly taking action against critics in the country, restricting Hong Kong's democracy movement more and more, putting pressure on prominent entrepreneurs such as Alibaba founder Jack Ma and calling off IPOs for private companies.
Nevertheless, Germany’s auto industry is relying more than ever on the country with its millions of potential customers, many of whom are buying a car for the first time.
Take BMW, for example: the group will invest one billion euros in China this year alone, according to the Munich headquarters upon request.
The number includes both plant structures and vehicle projects.
Last year, BMW first launched its new iX3 electric model in China - a symbolic commitment to the importance of the market and the economic hopes associated with it.
While the European markets are considered saturated with car stocks of well over 500 cars per 1000 inhabitants, experts in China expect strong growth in car sales after the pandemic.
There are only about 100 cars for every 1000 inhabitants.
In the United States, car sales fell by 14 percent last year due to the corona pandemic, and by 24 percent in Western Europe.
The Chinese market ended the year comparatively stable with a minus of six percent.
Source: WORLD infographic
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At the same time, sales of luxury cars grew against the trend.
"The premium market in China is developing faster than the market for passenger cars in general," said Hubertus Troska, Daimler's China boss, in Beijing shortly before Christmas.
"Mercedes benefits particularly from this."
This is reflected in the regional distribution of sales: the manufacturer sells more than a third of all cars in China.
The country is by far the most important market for the S-Class from Mercedes-Benz.
BMW has also increased its market share in China against the trend.
China's weight is increasing
Because sales in all other regions of the world have shrunk significantly as a result of the pandemic, the weight of China on the balance sheets of all manufacturers has continued to grow.
You could also say: their dependence.
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Volkswagen would not function as a group without its China business.
The core brand in particular is a largely Chinese company, with 53.5 percent of all vehicles sold by VW in 2020 in the People's Republic.
VW has been active in China since the early 1980s.
Under the rule of Deng Xiaoping, the group founded its first joint venture in Shanghai in 1984; today the joint ventures there have over 100,000 employees.
As in the rest of the world, the group is also investing heavily in electromobility in China: By 2024, 15 billion euros should flow into electrification together with the Chinese joint venture partners, according to Wolfsburg.
The Group's total investments outside China will amount to 150 billion euros over the next five years.
It is not possible to find out exactly how high the Daimler Group's investments are in China.
But they will certainly also run into the billions.
Daimler's truck division announced in December that it would work with its joint venture partner Beiqi Foton Motor to build a new plant for heavy tractor units.
There alone the investments amount to over 485 million euros.
Germany benefits from the investment agreement
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Despite all the criticism of the EU's investment agreement with China, the conclusion of which Chancellor Merkel hastily pushed through as EU Council President before the turn of the year, it is clear who the beneficiaries are: Germany's automotive companies.
They are preparing for business to continue to flourish in the years to come - in the shadow of the communist dictatorship.
"We are extremely pleased when trade relations improve," said Daimler board member Troska about the new agreement.
"The dismantling of tariffs and investment barriers benefits everyone." He assured that Daimler adhered to its own social and environmental standards "throughout the supply chain".
This text is from WELT AM SONNTAG. We will be happy to deliver them to your home on a regular basis.
Source: WELT AM SONNTAG