(Financial Times, Kana Inagaki, Edward White and Sebastien Ash, April 22, 2026)
Western brands are fighting to stay relevant in the world’s largest automotive market, launching new electric vehicles developed with Chinese technologies that they then intend to export to other international markets. Two years after groups like Volkswagen and Toyota announced plans to regain market share through a “in China for China” approach, executives hope to win consumers over with a range of new models showcased at this week’s Beijing auto show.
BMW will showcase its extended-frame electric SUV iX3, developed in China using local technologies from Momenta, Huawei, and Alibaba. Volkswagen, the largest European manufacturer, is designing and developing vehicles directly in China because what has been done in Europe is no longer competitive in the Chinese market. The German brand regained the top position with a 13% market share in the first three months of the year, mainly due to the decline in Chinese EV sales after many government subsidies ended.
Audi and General Motors are also turning to local partnerships, while Nissan aims to bring models developed in China to Latin America, Southeast Asia, and the Gulf, defining China as a “global hub of innovation and export.” Analysts warn, however, that the risk of cannibalization is high and that the real gap for Westerners is no longer in hardware but in software execution, where China offers a scale of talent difficult to replicate.
“In China for China” strategy to regain market share
“Two years after brands including Volkswagen and Toyota outlined plans to regain market share through cars made with local know-how according to an ‘in China for China’ strategy, executives hope to win consumers over with a range of new products displayed at the Beijing auto show.”
BMW uses Chinese technologies for the iX3
“The German group will showcase its extended-frame electric SUV iX3 developed in China using local technologies from Momenta, Huawei, and Alibaba.”
VW designs and develops vehicles directly in China
“We see that what we have done in Europe for a long period of time is not competitive in the Chinese market.” […] VW regained the top position with a 13% market share in the first three months of the year.”
Nissan turns China into an export hub
“Nissan aims to bring combined sales in China and exports from the country to 1 million units by 2030. […] ‘China becomes a global hub of innovation and export.’”
Main gap in software and talent
“The real gap for foreign manufacturers in China is no longer in hardware or EV platforms but in software execution, and that is fundamentally a talent issue. […] China offers a scale of software engineering talent difficult to replicate, both in volume and speed of iteration.”
(Excerpt from the newsletter by Giuseppe Liturri)
