German carmakers need China to compete globally, BMW CEO says ahead of Merz trip

By Christina Amann

BERLIN, Feb 19 (Reuters) - BMW Chief Executive Oliver Zipse has warned that ignoring China, the world's top auto market, would put at risk future economic success, saying on Thursday cooperation with Beijing was fundamental ahead of German Chancellor Friedrich Merz's first trip to the country.

Zipse will be part of a business delegation travelling with Merz to China next week, a closely watched journey as it will provide clues over how Europe's top economy defines its relationship with its top trading partner.

The visit follows a similar trip by British Prime Minister Keir Starmer last month, a sign of how European nations are seeking to deepen or revive business relations with China at a time when U.S. President Donald Trump has kicked off a global trade war.

'STRONG SIGNAL FOR DIALOGUE'

Berlin sees China as a key trade partner, but has also warned against dependencies, suggesting the current coalition might continue with a critical approach formulated under the previous government to the world's second-largest economy.

"Complex global challenges can only be solved by working together," Zipse told Reuters. "With his trip to China, the chancellor is sending a strong signal for dialogue and cooperation."

"Those who close their minds to China's enormous market and innovation potential are missing out on great opportunities for global growth and economic success."

Merz late on Wednesday said he would seek "strategic partnerships" during the visit.

INTENSE PRICE WAR

Companies such as BMW, Volkswagen VOWG_p.DE and Mercedes-Benz MBGn.DE have seen sales sliding in China, a market that has been driving profits for years but where subsidised manufacturing of electric vehicles has led to an intense price war with fast-growing local brands.

Meanwhile, legacy carmakers have fallen behind in the race to develop electric motors, software platforms and autonomous driving systems.

"Innovation and progress do not arise from isolation, but rather when pioneering spirit, openness, and global expertise come together," Zipse said.

The CEOs of Volkswagen and Mercedes-Benz will also travel with Merz to China, according to people familiar with the matter. German companies invested the most in four years in the Chinese market in 2025.