The "digital-intelligent war" in China's auto industry, spearheaded by domestic brands, is reaching a fever pitch, marking an epic transformation from "trading market for technology" to "setting global standards with technology".

Last year, new energy vehicles, which include EVs and plug-in hybrids, accounted for 47.6 percent of China's passenger car market, according to the China Passenger Car Association.

In terms of smart driving features, local giants like BYD are making such functions as automatic parking standard on their vehicles, even those priced below 70,000 yuan ($9,653).

Once known primarily as the world's largest car market, China is now setting the pace for technological innovation, reshaping global standards, and challenging traditional joint ventures to adapt or risk being left behind.

In the race for the future of mobility, the winners will not just be those with the best technology, but those who understand their customers best, said analysts.

FAW-Audi, the first premium vehicle joint venture in China, has proven the importance of integrating with German engineering with local market insights over three decades of operations, as the Chinese market evolves.

The two companies joined hands in 1988, which was China's first premium vehicle technology transfer partnership, with thousands of tons of technical documents were shipped from Ingolstadt in Germany to Changchun in Northeast China's Jilin province.

The collaboration soon led to local production of the Audi 100, setting the foundation for luxury car manufacturing in China.

But what truly set FAW-Audi apart was its ability to understand and respond to local consumer preferences.

One of its most pivotal moves came in 1999, when it rolled out the long-wheelbase Audi A6 (C5).

This innovation—designed specifically for Chinese customers who valued rear-seat comfort—reshaped the luxury sedan segment.

The long-wheelbase trend soon became an industry standard, with nearly all premium brands following suit.

By 2025, FAW-Audi's cumulative sales in China are set to surpass 10 million units.

The joint venture has established eight major bases, including three testing facilities, four production plants, and a marketing center in the "digital city" of Hangzhou, Zhejiang province, where Alibaba and DeepSeek are headquartered.

This collaboration has created nearly 500,000 jobs across the supply chain and contributed over 700 billion yuan in tax revenue.

The strategic partnership between FAW and Audi exemplifies the success of joint ventures, showcasing a "Chinese paradigm" that deeply integrates local ecosystems with global automotive giants.

Today, that same market-driven approach is guiding the two carmakers' cooperation as it navigates the shift to smart and electric vehicles.

The two companies has made a 20-billion-yuan investment in a state-of-the-art new energy vehicle production facility in Changchun, where it is localizing Audi's Premium Platform Electric architecture, which was codeveloped with Porsche.

Key models from the facility include the Audi Q6L e-tron, a premium electric SUV tailored for Chinese consumers, and a China-specific A6L e-tron, designed with extensive local R&D input.

Beyond electrification, intelligent driving is the next battlefield. Huawei's smart vehicle solution is being integrated into those models.

Combining Audi's legendary quattro all-wheel-drive technology with advanced smart driving features, FAW and Audi are working to deliver a uniquely Chinese premium driving experience in the new age.

As the market shifts toward an era defined by intelligence, electrification, and digital ecosystems, FAW and Audi's strategy—combining global expertise with local insight—will be more important than ever, said analysts.