① The 2025 Shanghai Auto Show focuses on intelligent electric vehicles, with foreign car companies accelerating their integration into the China supply chain, while local innovation forces are rising; ② Under the pressure of transformation, Toyota is deepening its local layout, building a wholly-owned factory in Shanghai, and betting on localization and supply chain collaboration; ③ Joint venture brands reinforce local innovation chain collaboration, and Chinese supply chain companies are accelerating their dominance in the global intelligent electric vehicle industry.
The Star Daily reported on April 26 (Reporter Tang Zhixiao) that in the wave of accelerated intelligent electrification, the Shanghai Auto Show has become not only a stage for major car companies to debut new models but also an important node for multinational car companies to layout global innovation chains.
On one hand, multinational car companies such as Mercedes-Benz, Volkswagen, BMW, and Ford are showcasing the results of deep collaboration with local Chinese supply chain companies: from intelligent cockpits to advanced driver assistance systems, from electric drive systems to large language model integration, the integration of technology is accelerating.
On the other hand, domestic supply chain companies are accelerating their entry into the global market. Suppliers such as Contemporary Amperex Technology, Nanfang Black Sesame Group, and Horizon are appearing alongside OEMs in the vehicle exhibition hall.
Toyota is deeply cultivating the China market.
Among them, Toyota's performance is particularly notable. It not only debuted the Platinum Smart 3X equipped with the urban NOA advanced intelligent driving solution but also announced during this auto show that it will build a wholly-owned electric vehicle and Battery research and manufacturing factory in Jinshan District, Shanghai, planning to start production in 2027.
By deepening collaboration with the China innovation chain, Toyota attempts to accelerate its integration into the new energy and intelligent industry cycle through a wholly-owned model. The firm commitment of multinational companies to the Chinese market is becoming a certain force penetrating the fog of global trade.
Behind Toyota's layout may be the real pressure it is facing.
In May 2024, Toyota's production in the Chinese market plummeted by 21.7% year-on-year, becoming the region with the largest decline among major global markets. On a global level, Toyota's production has declined for four consecutive months.
Toyota CEO Koji Sato stated at the first quarter communication meeting this year: "We are accelerating the transition toward global electrification, led by the Lexus brand, especially deepening local layouts in key markets."
According to Toyota's plan, the annual sales target for electric vehicles is set at 1.5 million units by 2026, and it is expected to reach 3.5 million units by 2030, with Lexus given the crucial task of breaking into the Chinese market.
Toyota's decision to establish a wholly-owned factory in Jinshan District, Shanghai, is the result of multiple overlapping factors.
First is supply chain capability. According to information released by Toyota during the auto show, the factory aims to achieve over 95% local procurement rate for components. The Shanghai area has formed a complete New energy Industry Chain, covering Battery, electric drive systems, Intelligent Transportation Sensors, providing solid support for Toyota's localization of manufacturing, cost control, and technology adaptation in China.
It is understood that Toyota's Intelligent Electric Mobility division (IEM by TOYOTA) is accelerating the construction of local R&D systems to cope with the trend of intelligent driving technology innovation in the Chinese market far exceeding the global average.
According to analysts at Bloomberg New Energy Finance (BNEF), "For multinational automakers, the Chinese supply chain is no longer simply a supportive role, but an indispensable part of the global innovation chain." Morgan Stanley also stated in a report that foreign brands generally enhance their electrification and intelligence competitiveness through "R&D in China + supply chain collaboration."
Second is the policy chain guarantee. During a visit to the auto show, Shanghai Municipal Party Secretary Chen Jining stated that Shanghai will continue to optimize the business environment and support multinational companies in landing more new technologies and new layouts in Shanghai, promoting deeper collaboration within the local industry chain.
As China's first wholly foreign-owned vehicle manufacturing project, Tesla's Shanghai Gigafactory, since its completion and production start in 2019, not only achieved 'construction in the same year, completion in the same year, and production in the same year,' but also reduced the manufacturing cost per vehicle by over 30% through the integration of more than 95% of the local supply chain, greatly enhancing global capacity and profitability.
Tesla's global vice president Tao Lin has stated publicly, 'The 95% localized supply chain is the core of the Tesla Shanghai miracle, and the early layout determined the subsequent competitive advantage.'
Reports indicate that Toyota is also seeking similar treatment to Tesla for its wholly-owned factory established in Shanghai, including tax reductions, land support, and 100% control, to ensure dominance in capacity and supply chain synergy during a new round of transformation.
Multinational automotive companies are rapidly binding with domestic supply chains.
In recent years, the layout logic of foreign automotive companies in the Chinese market has undergone significant changes: from 'satisfying local consumption' to 'relying on China's innovative power to feed back the global system,' from 'introducing single products' to 'integrating technology, supply chain, and production,' multinational companies no longer view China solely as a sales market but have upgraded it to a global strategic pivot for R&D, manufacturing, and export.
This trend is particularly evident at the 2025 Shanghai International Auto Show.
Among them, BMW showcased a new generation of intelligent voice interaction system developed based on a large language model co-created with Alibaba and DeepSeek, and announced deepened integration with Huawei's Harmony ecosystem, with related results to be first applied to BMW's new generation models.
BMW Group Chairman Zipser stated during the auto show, 'BMW always insists on 'innovating in China, for China, with Chinese speed,' and the strategic position of the Chinese market in the global innovation landscape is increasingly rising.'
Volkswagen, through its joint venture with Horizon, established CoolCore Technology Company, developing high-level Advanced Driver Assistance Systems (ADAS) specifically designed for Chinese road conditions, which debuted on the ID. AURA and ID. ERA concept vehicles.
The Chairman of Volkswagen Group (China), Berndt, stated, "China is not only the largest single market globally but also the most important ecology for the implementation of our intelligent technology."
Nissan showcased its first plug-in hybrid pickup truck, FRONTIER PRO, designed for the Chinese market, and announced integration with the DeepSeek large model and the 540° transparent chassis L2+ intelligent driving system. The N7 model is built on a newly developed local new energy architecture.
The Chairman of Nissan's China division, Marcus, stated, "Intelligent and electrification transformation in China is developing far faster than the global pace, requiring deep collaboration with local technology firms."
Audi, in collaboration with SAIC, released its first mass-produced model, the Audi E5 Sportback, and globally launched the fuel model Audi A5L Sportback equipped with Huawei's QianKun intelligent driving technology.
Audi China CEO, An Shihau, stated, "The SAIC Audi cooperation project demonstrates a deep integration of the Audi brand with China's local innovation ecology."
Domestic supply chain enterprises are accelerating their global outreach.
As multinational auto companies deeply integrate into China's innovation ecology, local supply chain enterprises in Shanghai are encountering more opportunities.
At this year's Shanghai Auto Show, the aforementioned trends are more intuitively reflected: Contemporary Amperex Technology, Momenta, Nanfang Black Sesame Group, Horizon, and other supply chain companies have exhibition areas on par with the main manufacturers in the vehicle exhibition hall, becoming the "new stars in the spotlight." BMW, Nissan, Mercedes-Benz, Volkswagen, Honda, and other automakers have announced their integration of advanced driver assistance, intelligent cockpits, and large model ecosystems in China, further strengthening the local innovation chain.
At the same time, international traditional supply chain giants are accelerating their transformation towards intelligence. Marcus Heyn, a member of the Board of Directors of Bosch Group, stated that the new automotive safety regulations from the Chinese government are encouraging, and Bosch will launch a segment-based AI end-to-end driver assistance solution by the end of this year. Wang Weiliang, president of Bosch Intelligent Transportation Business in China, stated, "Bosch always maintains healthy competition and does not participate in price wars. The industry will tend to consolidate in the future driven by regulations."
In addition, the localization of global parts companies has become another "scenery." Yang Xiaoming, president of Aptiv China and the Asia-Pacific region, stated, "We are fully promoting our Localization Strategy 2.0, supporting comprehensive chip localization, and creating a complete China solution." Visteon's global vice president and president of China, Wei Wei, also stated that foreign parts companies must simultaneously address "challenges of speed and cost" while accelerating the localization of manufacturing segments and local collaboration of parts.
Xu Jie, president of Manheimer Group’s global passenger vehicle division, admitted: "China is leading the revolution in new energy and intelligent mobility, and the global supply chain landscape is being redefined."
Overall, as smart electrification accelerates its evolution, Shanghai is transforming from "the global automotive manufacturing base" to "the core of the global automotive innovation supply chain." As summarised by Xu Daqian, president of Bosch China: "An innovative and robust supply chain system, as well as collaboration across the upstream and downstream of the industry chain, are key to the continued success of China's automotive industry."
In this new round of global industrial chain development process, Chinese supply chain companies are transitioning from being in a "supporting role" to becoming a "source of technology," and are occupying increasingly proactive positions in the global market landscape.
