Efforts stepped up

In May, survey findings released by J.D. Power showed that 53 percent of respondents said they would choose Chinese marques. Some 67 percent of those who drive Chinese vehicles said they would choose domestic brands again.

This is most likely why international brands are accelerating efforts to localize their production as well as their design and development work in China.

Chang Qing, CEO of Cariad China, said in April the company had more than 600 software engineers in China, and this figure is expected to double by the end of next year, with over 90 percent of the engineers being Chinese.

"Our newly established China team will enable us to respond quickly to local needs. We will develop, update and continuously improve our products at 'China speed' based on local customers' expectations," Chang said.

Cariad China is also building a nationwide R&D network. Beijing, Shanghai, Chengdu, capital of Sichuan province, and Hefei, the Anhui provincial capital, have been earmarked as initial R&D hub locations.

Engineers will develop and adapt software in China for Volkswagen's marques, including Audi and Porsche.

Meanwhile, Tesla has set up a R&D facility in Shanghai, the company's first such premises outside the US.

Tesla's team in China is tasked with designing, developing and producing new vehicle models and products with Chinese elements, and selling them globally, according to the company.

The carmaker has made its Shanghai plant a major export hub. In the first half this year, a total of 97,182 Tesla Model 3 sedans and Model Y SUVs were shipped overseas from this plant.

Early this month, Germany's ZF announced a plan to build a plant in the coastal city of Rizhao, Shandong province, which will produce and sell air bags and other vehicle safety products. Investment in the plant, which is expected to be operational by the end of this year, will reach 60 million euros, according to the deal ZF signed with the local authorities.

Related R&D work will be carried out at the plant, which will occupy 14,000 square meters.

ZF said products manufactured at the plant will be sold to carmakers in China and will also likely be exported to countries such as Thailand, South Korea, the US, Japan and Vietnam.

In three years, annual sales revenue at the Rizhao plant is expected to exceed 1 billion yuan, according to ZF.

Holger Klein, a board member in charge of ZF's operations in the Asia-Pacific region, said, "China is the world's largest automotive market, a dynamic, resilient and attractive market, and one in which we have the fullest confidence."

Scheduled to serve as ZF chairman and CEO next year, Klein added, "As a multinational company, we are an integral part of China's social and economic fabric."

Since arriving in the nation in 1981, ZF has established some 50 production facilities in more than 20 cities.