Domestic carmakers expand R&D in Europe

Shoppers inspect a Chery SUV on display in a mall in the Netherlands in June 2025. DE YONGJIAN/CHINA NEWS SERVICE

Chinese automakers are expanding their research and development operations in Europe as they work to develop models better suited to local regulations, driving conditions and consumer demand, as part of a broader effort to make overseas R&D part of product planning, design and engineering adaptation at an earlier stage.

Chinese automaker Geely Auto Group announced in March that it had established Geely Technology Europe, a unified European R&D center that brings together the company's engineering teams in Gothenburg, Sweden, and Frankfurt, Germany.

The group said Geely Technology Europe will work with the Geely Auto Research Institute in China on vehicle planning and development. It aims to support global vehicle programs and reduce the gap between new model launches in China and overseas markets to less than six months. The group also plans to expand the number of vehicle programs managed in Europe by 2027.

Chery has placed its European operations and R&D functions in Barcelona, Spain, giving it a role that covers both regional management and product adaptation. In April, the company opened its European Operations Center and launched the Spain R&D Institute in the city.

The operations center will coordinate regional operations, compliance, supply chain coordination, finance and public affairs. Meanwhile, the institute will focus on electrification, intelligent mobility and sustainable development, according to the company.

Chery said its local R&D work will cover adaptation to European regulations and customer needs, including family-oriented models, vehicle performance on European roads and intelligent driving functions suited to local traffic.

Munich, Germany, a major European automotive hub, has also become an R&D base for Chinese automakers. XPeng has established its first European research center in the city, focusing on driver-assistance technologies and intelligent cockpit systems. XPeng said the center will help it better understand European users and incorporate local needs into future product development.

Xiaomi Auto has outlined plans for a Munich R&D center focused on high-performance vehicle development, design, chassis tuning and advanced automotive technologies, according to news reports.

Ron Zheng, a senior partner at Roland Berger and head of its automotive practice in Asia, said European markets vary in consumer demand, market conditions and powertrain preferences.

Chinese automakers should not adopt a single approach across Europe, Zheng said. They need to define their strategies according to their own positioning, target customers and local market conditions.

Choosing the right market-entry path is a major challenge for Chinese automakers entering Europe, he said. Depending on their resources and market positioning, some companies could start with Southern European markets such as Spain and Italy, consider Eastern Europe as a production base, or use Northern Europe's R&D resources to support expansion.

For Chinese automakers, R&D teams in Europe can support product planning, regulatory adaptation, software localization and testing of driver-assistance functions. The region also offers mature engineering resources and established supply chains, while its rules cover safety, emissions, cybersecurity, data protection and battery recycling.

For electric vehicles, local adaptation may involve battery performance in different climates as well as ride and handling on European roads. Driver-assistance systems need to respond to local traffic rules and road conditions, while intelligent cockpit systems should support local languages and match user habits.

Zheng said compliance remains a key requirement in Europe, especially in areas such as data security, privacy protection and local content rules. Such compliance issues are particularly important as Chinese automakers bring driver-assistance and intelligent cockpit technologies to overseas markets, where software, data and supply-chain rules can affect vehicle launches and market operations. Local expertise can help companies identify compliance risks earlier and adjust product functions, supplier arrangements and market plans before launch.

Challenges remain in areas such as brand recognition, sales and service networks, cross-cultural management and regulatory adaptation. Some also need to strengthen capabilities in chassis tuning, precision manufacturing and global project management.

For market development, Zheng said Chinese automakers need to recognize their own positioning and identify target price ranges and user groups. They should also work closely with dealer partners that can help them understand customers, expand sales channels and carry out marketing in Europe.

wangyuchen@chinadaily.com.cn