In the past decade, China's auto parts industry has successfully opened up a position in the global market with its complete supply 

chain, cost advantages, and rapid response capabilities. However, with the acceleration of the transformation of electric vehicles in 

Europe and the restructuring of the automotive industry chain, relying solely on cross-border e-commerce and trade exports is no 

longer sufficient to meet the demand for entering the mainstream European market. More and more Chinese auto parts companies 

are making investment in building factories and acquiring shares a strategic priority, in order to deeply integrate into the European 

industrial chain and gain long-term competitive advantages.

·1 The Strategic Value of the European Automotive Parts Market

Europe is not only the birthplace of automotive culture, but also one of the most mature automotive industry clusters in the world:

• Large industrial scale: The European automotive and parts market has a scale of over 400 billion euros, of which the after-sales market 

exceeds 180 billion euros;

• Concentration of OEMs: Volkswagen, BMW, Mercedes Benz Stellantis、 Renault and other giants have set up factories in Europe, creating 

a radiation effect on component suppliers;

Strong policy drivers: The EU's green transformation and carbon neutrality goals are driving rapid growth in demand for electric vehicles, 

lightweight, and intelligent components.

In this context, Europe is not only a consumer market, but also an industrial center that requires deep participation.

·2 From Trade to Investment: The New Trend of Chinese funded Auto Parts

The traditional "selling products" model mostly focuses on trade and cross-border e-commerce. But to enter the Tier 1 and Tier 2 supply 

systems in Europe, relying solely on exports is far from enough. In recent years, Chinese auto parts companies have been directly entering 

the local European industrial chain through "investment in factory construction+technology mergers and acquisitions".

Typical cases (5 representative enterprises)

1. Yanfeng

One of the world's largest automotive interior suppliers.

Establishing multiple research and production bases in Germany, Czech Republic, and Slovakia to provide cockpit and interior systems for 

major automakers such as Volkswagen, BMW, and Mercedes Benz.

2. CHERPON Auto

Invest and establish factories in Germany and Hungary, focusing on electric drive systems and precision components.

Through localized manufacturing, enter the core supply chain of new energy vehicles in Europe.

3. Joyson Electronics

We have research and development centers and safety system factories in Germany, specializing in automotive electronics and intelligent 

driving systems.

Successfully acquired international companies such as KSS and Takata, integrated global resources, and served customers such as BMW 

and Volkswagen.

4. Fuyao Glass

Establish factories in Germany and Russia to provide automotive glass for automobile manufacturers such as Mercedes Benz, BMW, and 

Volkswagen.

By producing locally in Europe, we can shorten the supply chain and enhance the brand's international influence.

5. CATL (Contemporary Amperex Technology)

Building Europe's first battery factory in Thuringia, Germany, with a planned production capacity of over 14GWh.

Become a core supplier of power batteries for European car companies such as BMW, Volkswagen, and Mercedes Benz.

The commonality among these enterprises is that they are no longer just "exporting parts", but are deeply involved in the core links of the 

European industrial chain through integrated production and research, localized manufacturing.

·3 Three major advantages of investing in building factories

1. Enter the mainstream supply chain

Setting up factories in Europe allows direct access to local OEM and Tier 1 systems, shortening supply chain response cycles and enhancing cooperation stability.

2. Policy and market dividends

The European Union and Central and Eastern European countries (such as Hungary, Poland, and the Czech Republic) generally provide tax exemptions and subsidies for foreign manufacturing investment;

The local government actively attracts investment in the new energy vehicle industry chain, and the landing of Chinese funded enterprises 

can receive policy support.

3. Brand and compliance advantages

Localized production helps meet the strict certification and environmental standards of the European Union, while enhancing brand credibility 

in the minds of European customers.

·4 The Challenge of Investing in Europe

Despite the enormous opportunities, investing in building a factory is not an easy task.

Cost pressure: Labor costs in Europe are generally higher than in China, requiring cost control through automation and lean production.

Cultural and management differences: Cross cultural management, union systems, and employment regulations all require companies to have mature overseas governance capabilities.

Supply chain support: Although some Central and Eastern European markets have policy incentives, there is a lack of upstream and downstream support, and companies need to consider how to build a complete ecosystem.

·5 Suggestions on the Overseas Strategy of Chinese Auto Parts Enterprises

1. Site selection: Priority should be given to Central and Eastern European hubs

Hungary, Poland, and Slovakia have become hot spots for investment in new energy vehicles and components in Europe, with advantageous geographical locations close to German OEMs, as well as policy subsidies and lower labor costs.

2. Mode: Integrated layout of production and research

Simply building a factory is not enough to form a barrier. A research and development center should be established at the same time to jointly develop with European customers, enhance bargaining and long-term cooperation status.

3. Cooperation: Joint mergers and acquisitions and joint ventures

Joint ventures with local European component companies or research and development institutions are a shortcut to quickly enter the supply 

chain. Acquiring technology and customer resources through mergers and acquisitions to lower market entry barriers.

4. Direction: Focus on new energy and intelligence

Electric drive systems, lightweight materials, intelligent cabins, and charging facilities will be the key areas of the European market in the next 

5-10 years.

·6 From the edge to the core

The European market is in a period of industrial transformation, with a rapid release of demand for new energy vehicles and next-generation components. For Chinese auto parts companies, entering the consumer market through cross-border e-commerce can quickly capture the 

market, but in order to truly enter the mainstream industry chain, a crucial step of "investing in building factories" must be taken.

Enterprises such as Yanfeng, Quanfeng, Junsheng Electronics, Fuyao Glass, and CATL have proven that this path is not only feasible, but can also 

help Chinese companies transform from "product exporters" to "system suppliers" and establish a foothold in Europe.

In the next decade, Europe may become a strategic bridgehead for China's auto parts industry to shift from "selling goods overseas" to "rooting itself overseas".