German trio bets on Chinese tech to stay in race

Premium overseas carmakers are looking to rev up cooperation with Chinese technology companies as part of their efforts to prevent losing further ground to local rivals in the Chinese market.

Mercedes-Benz and ByteDance upgraded their partnership last week to cover aspects such as smart cabin functions, intelligent driving as well as digital marketing.

The German carmaker said its electric CLA sedan, which is to be launched this autumn, will feature ByteDance's chatbot Doubao, the most popular artificial intelligence app in China.

In the same week, Mercedes-Benz announced that it will soon roll out a smart driving system in China in partnership with autonomous driving startup Momenta, starting with the CLA.

The system draws exclusively on Chinese driving data and was fine-tuned by teams in China and Germany to meet Mercedes' safety and performance standards while reflecting local habits, the companies said.

Drummond Jacoy, senior executive vice-president at Mercedes-Benz China, said the company is deepening cooperation with China's leading tech firms to deliver safer, smarter and more intuitive driving experiences tailored to Chinese customers.

Momenta, a pioneer in end-to-end autonomous driving, has already deployed its technology in mass production for assisted driving.

Mercedes was the first global carmaker to invest in Momenta back in 2017, which is now a popular partner for premium brands.

BMW will feature Momenta technology in its Neue Klasse models starting with the iX3 SUV from 2026.

The model will also embed AI capabilities developed with partners including Alibaba and Deep-Seek, while drawing on Huawei's HarmonyOS ecosystem for services such as digital keys and HiCar connectivity.

The company calls the iX3 a benchmark for "China-exclusive intelligence, driving dynamics and luxury".

For Audi, Momenta's system is one of the selling points for its locally developed electric E5 Sportback, launched earlier this month.

The company is also using Huawei's smart driving technology for some of its other models in the Chinese market.

Analysts said the three have pinned high hopes on their new-generation models with Chinese technology to stay relevant and take back some lost ground in the fast-evolving Chinese market.

"If these models, namely the CLA, the iX3 and the E5 Sportback, fail to impress car buyers, the three brands will disappear from the list of premium brands for the next-generation customers," said one analyst who asked to stay anonymous.

Over the past decades, the German trio have been the best-selling carmakers in China in the premium gasoline vehicle segment.

But local startups including Aito, Nio and Li Auto are emerging as new choices, primarily because of their smart driving capabilities and in-car features.

Other Chinese brands including Geely's Zeekr and Changan's Avatr are wooing their customers away as well, especially in the entry-level segment.

While it is challenging to come up with their own solutions, foreign brands have found that integrating domestic software solutions offers an efficient path while managing the complexity and cost of in-house development.

"Keeping pace with China speed", referring to the rapid iteration and application of new technologies, is now essential for multinationals operating in the country, said Zhang Lin, managing director of the German Association of the Automotive Industry China Office.

lifusheng@chinadaily.com.cn