As German Chancellor Friedrich Merz prepares this week for his first official visit to Beijing since taking office, the presence of leading industrial executives underscores the trip’s strategic significance.
Among them is Oliver Zipse, chief executive of BMW Group, who has made clear in remarks reported by Reuters that engagement with China is indispensable for German automakers.
Ahead of the trip, Zipse was quoted as saying carmakers “need China to compete globally” and warning that ignoring the world’s largest auto market would risk “future growth and competitiveness.” His message frames the visit less as symbolic diplomacy and more as economic necessity.
Heavyweight figures from automotive
Zipse will travel alongside other heavyweight figures of Germany’s automotive industry. Media reports, including Reuters and German business press, indicate that Oliver Blume of Volkswagen AG and Ola Källenius of Mercedes-Benz Group are also part of the delegation.
Together, the three CEOs represent the core of Germany’s automotive export engine and its technological transition toward electrification. Their joint presence underscores China’s centrality to the strategic outlook of the country’s flagship industry.
Unusually high stakes
For BMW, the stakes are unusually high. China is not merely a sales destination but a structural pillar of the company’s global footprint.
BMW produces locally through its majority-controlled joint venture in Shenyang, operates extensive research and development facilities in the country, and relies on Chinese demand for a significant share of its premium vehicle sales.
This deep integration provides scale and proximity to the world’s most dynamic electric vehicle market, but it also increases sensitivity to regulatory shifts and geopolitical tension.
Blowing hot and cold
The broader industry message has been articulated by Hildegard Müller, president of the Verband der Automobilindustrie (VDA).
In comments to Die Welt reported by dpa, Müller said the German side must present “a detailed account of where China is distorting competition” and push for further market opening, while warning against provoking counter-reactions through aggressive EU measures such as procurement preferences or tariffs.
Her remarks capture the dual strategy now shaping German industry’s position: insist on fairer competition while avoiding escalation.
That caution reflects mounting pressure on German carmakers in China. Domestic electric vehicle brands, often benefiting from state-supported industrial policy, have intensified competition in both volume and premium segments.
At the same time, a new Chinese luxury tax has disproportionately affected higher-priced imported vehicles — a sensitive issue for premium-focused manufacturers like BMW and Mercedes-Benz.
Sales momentum for several German brands has weakened amid fierce price competition and rapid technological advances by local rivals.
Rare-earth tensions
Complicating matters further are tensions over rare-earth exports, which are critical for electric motors and advanced automotive components. European manufacturers have expressed concern about supply vulnerabilities stemming from Chinese trade restrictions. Securing predictable access to these materials has therefore become intertwined with broader diplomatic efforts.
The international context adds another layer of uncertainty. Trade frictions between Europe and China over electric vehicle subsidies and procurement practices are simmering.
Renewed dabate on US tariffs
Meanwhile, renewed debate in the United States over broad-based tariffs has raised the specter of global fragmentation. If transatlantic protectionism intensifies, China’s importance for German exporters would grow, narrowing Berlin’s room for maneuver. Conversely, a stable global trade environment would strengthen Europe’s leverage in pressing Beijing for reciprocity.
Zipse’s positioning suggests BMW is betting on engagement rather than confrontation. The company has consistently advocated for open markets and multilateral trade structures.
Participation in China’s innovation ecosystem — from battery supply chains to digital vehicle platforms — is seen not as optional but as embedded in BMW’s long-term competitiveness.
The delegation accompanying Merz reflects this reality: political dialogue may encompass security and strategic concerns, but for BMW, Volkswagen, and Mercedes-Benz, the trip ultimately centers on safeguarding market access, ensuring fair competitive conditions, and preserving the industrial foundations of Germany’s most important sector in an increasingly divided global economy.
