Valeo CEO: China has 'highest level of innovation' in global auto industry

China has the "highest level of innovation, competitiveness and speed" in today's automotive industry, said Valeo CEO Christophe Perillat, who sees the country as an increasingly important driver of the company's global growth.

Perillat previously described China's auto market as the "fitness center" of the global automotive industry. During his latest visit to China this week, he said the rapid development of the market continues to push companies to improve.

"In China today we find the highest level of innovation, the highest level of competitiveness and the highest speed as well," Perillat said in an interview with China Daily on Monday.

"That's why I use this image of the fitness center of the auto industry. You're running all the time for higher innovation, higher competitiveness and higher speed."

China is Valeo's largest market worldwide, with about 28 billion yuan ($3.9 billion) in annual sales. The company employs about 17,000 people and operates 22 plants and 10 R&D centers in the country.

The rapid rise of Chinese automakers has prompted Valeo to continuously adapt its business.

In the first half of 2026, new orders from Chinese carmakers were equivalent to five times Valeo's sales to those customers, Perillat said, highlighting the company's growth potential in China.

"We expect to grow significantly in China in the next years," he said. "We have the technology, we have the products that can help the Chinese carmakers to be successful in China, but as well to be successful globally."

To compete with increasingly strong Chinese suppliers, Valeo is deepening its localization in China.

"We are Chinese in China," Perillat said, noting that Valeo has operated in the country for 32 years.

Over the past five years, the company's additional industrial and R&D investment in China has been equivalent to about one year of sales, or roughly 20 percent of annual sales on average.

At the same time, Valeo is leveraging its global footprint to support Chinese automakers.

The company operates in 29 countries and can help Chinese OEMs meet local regulations and standards and establish manufacturing and R&D capabilities overseas.

"We are Chinese in China, but we are not only Chinese in China. We are also a global company," Perillat said.

"Whatever we do well outside of China, we can copy and paste in China, and whatever we do well in China, we can copy and paste for the rest of the world."

Perillat said China should not simply be viewed as a manufacturing hub.

"China is as well an innovation hub. China is as well a technology hub," he said, adding that innovation and technology were creating a positive cycle that further strengthened the country's manufacturing capabilities.

Perillat said the globalization of Chinese automotive innovation is already underway.

Technologies developed in China are being deployed in other markets, while technologies developed elsewhere are also being introduced into China.

He said the speed of development in China is important. In some cases, a product development process that takes about three years outside China can be completed in about one year in China, he said.

Valeo is adapting its development processes accordingly and increasingly using AI in software development as well as in the design of mechanical components and printed circuit boards.

The company can then apply the more efficient processes developed in China to its global operations.

The company is also exploring opportunities beyond automotive. Valeo is conducting proof-of-concept projects to apply its automotive thermal-management technologies to cooling high-performance chips in data centers.

Looking ahead, Perillat said Valeo's growth strategy will focus on three areas: increasing the technological content of each vehicle, strengthening its presence in key markets including China, India and North America, and expanding beyond automotive applications.

"China is very central in this growth story because of the technology fitness center of the auto industry," Perillat said. "This is where we find the highest level of innovation and technology."