Nation's global influence on smart driving industry grows

China's fast-growing smart electric vehicle ecosystem is giving China-based teams at multinational automakers a key role in vehicle development and technology integration, as global brands move away from adapting overseas-developed models for the domestic market.

The shift reflects China's growing role as a base for electric powertrains, advanced software, intelligent cabins, driver-assistance technologies and supply chain capabilities.

Renault Group has expanded its research and development presence in China. In June, the French automaker opened a new R&D office in Hangzhou, Zhejiang province, as part of its Advanced China Development Center, which was launched in Shanghai in 2024 to develop electric vehicle products for the European market.

The Hangzhou office will focus on software development, artificial intelligence and user experience technologies. Meanwhile, the Shanghai site will specialize in hardware integration, powertrain systems and full-vehicle engineering.

Renault said the two-site structure is designed to combine software and hardware capabilities to support its global vehicle programs.

Renault's China development center has also been involved in the Twingo E-Tech electric, a compact EV designed for the European market. The program was completed in 22 months with support from Chinese partners, as part of Renault's efforts to combine European engineering with China's EV capabilities.

Ma Sheng, a senior researcher at the China Automotive Strategy and Policy Research Center, said multinational automakers are expanding R&D centers in China and developing models based on Chinese road conditions, user habits and regulatory requirements, instead of mainly introducing overseas-developed products.

Volkswagen Group China has also moved deeper into local technology development. It has started production of the first vehicle built on its China Electronic Architecture.

Jointly developed with Cariad China and local partners including XPeng, the architecture is first being used in the ID. UNYX 07 electric sedan. It supports functions such as AI-powered smart cockpits, China-specific driver-assistance systems and full-vehicle over-the-air updates.

The group said the project confirms its local end-to-end capabilities in software-defined vehicle development, from concept and engineering to validation and mass production.

The changing role of China-based teams has also drawn attention from industry observers. Oliver Oehms, executive director of the German Chamber of Commerce in China-North China, said knowledge flow in the auto industry no longer moves in just one direction, as more R&D work is carried out in China.

SAIC-GM's Buick marque has also introduced the Buick Xiao Yao Super Architecture for Electra, its new energy sub-brand in China. The architecture is designed to support multiple new energy vehicle powertrains and vehicle body types, while strengthening capabilities in battery technology, intelligent driving and smart cockpit systems.

SAIC-GM's local R&D capability is supported by the Shanghai-based Pan Asia Technical Automotive Center, a design and engineering facility co-built by GM and SAIC Motor. The center provides automotive development services covering design, engineering development, testing and validation, supporting SAICGM's vehicle engineering and technology integration work in China.

Ma added that the faster rollout of intelligent electric vehicles in China has made R&D more important for multinational automakers, as product definition, software integration and user experience increasingly need to be shaped around local demand from the early stages of development.

China's supplier ecosystem is also supporting the shift. An industry report released in Shanghai earlier this month said the number of Chinese companies among the world's top 100 automotive suppliers rose to 20.

Their combined revenue share increased from 14 percent to 17.2 percent, surpassing that of US companies and making China the third-largest regional contributor to revenue among companies on the list.

The report said electrification and intelligence are shifting competition toward batteries, automotive electronics, chassis-by-wire systems and vehicle software. These changes are giving Chinese suppliers a larger role in vehicle ecosystems, from component supply to deeper participation in platform development and system integration.

The report also showed that the new energy segment of China's top 100 automotive suppliers recorded revenue growth of 26.9 percent in 2025, while the automotive electronics segment had an R&D intensity of 6.8 percent. The figures point to Chinese suppliers' growing presence in segments closely tied to smart EV development, beyond their expansion in scale.