Audi CEO seeks to catch up in China in test of Germany’s grit

BLOOMBERG

Markus Duesmann, the chief executive officer (CEO) of Audi, flew to China last week to tackle a problem that’s indicative of the challenges facing Germany: how to compete with its biggest trading partner on new technology.
The head of the German luxury brand went to visit Audi’s Chinese joint venture (JV) partners — China FAW Group Co. and SAIC Motor Corp. — to discuss ways to sell more electric vehicles in the world’s largest car market. The effort is critical not just for the Volkswagen AG unit but also as a test of Germany’s ability to navigate threats to its competitiveness.
Germany’s vaunted automakers dominated the combustion-engine era, but the transition to electric vehicles puts their standing at the pinnacle of the auto industry at risk. Audi, Mercedes-Benz Group AG and BMW AG are ramping up their range of battery-powered models in a critical bid to compete with Tesla Inc and upstarts from China, including BYD Co. and NIO Inc.
The shift to cleaner technologies presents more than one dilemma for Germany. The war in Ukraine exposed the country’s reliance on cheap Russian gas for its energy needs, and the shift to renewable power has been slow. There’s also raw materials needed for batteries, which mainly come from China.
That means Germany’s automakers need to overhaul their product range and their manufacturing system at the same time.
For years, Germany gratefully sold cars, chemicals and machinery to the Asian superpower, but more recently the tables have turned and the trade deficit is growing.