Valeo CEO calls China 'fitness center' for global auto industry

French auto parts supplier Valeo SA is doubling down on its commitment to China, with the country now at the center of its innovation and global strategy, CEO Christophe Perillat said during his first visit to Auto Shanghai.

"China has become the most important market for the automotive industry — not just in scale, but in innovation, technology, and competitiveness," Perillat said in an interview with China Daily. "We call China the fitness center of the automotive world."

The French auto parts maker first entered China in 1994, and now employs over 18,000 people across 27 production plants and 13 R&D centers in the country.

Valeo plans to open a new R&D hub in Shanghai this year focused on advanced driver assistance systems, as well as a new production facility dedicated to "smart driving" technologies.

Perillat emphasized that the company is no longer just bringing global technologies into China — it's developing them locally.

"We are inventing in China," he said, noting that Valeo now has 4,500 engineers in the country, a significant portion of whom are software developers.

China's breakneck development pace — with vehicle programs completed in months rather than years — has pushed suppliers like Valeo to localize R&D and production.

"We are Chinese in China," said Perillat. "When we're in India, we're Indian. In Europe, we're European."

Valeo's business is increasingly tied to Chinese carmakers, which now account for half of its sales in the market.

That's still behind the two-thirds share local automakers hold domestically, but Perillat said Valeo is catching up fast, with over 60 percent of new 2024 orders coming from Chinese OEMs.

As Chinese carmakers push into overseas markets, Valeo sees an opportunity to leverage its global footprint — from Europe to South America — to help them navigate local regulations and supply chain challenges.

"For Chinese OEMs to be successful globally, they must also be local," he said. "That means local manufacturing, local suppliers, local teams."

While rising protectionism in global trade is reshaping supply chains, Perillat sees long-term opportunities in deeper China-Europe collaboration.

"Chinese vehicles are already gaining ground in Europe. They're well-designed, high-tech, and competitively priced," he said. "But to truly succeed, they will need to establish manufacturing and supplier bases in Europe."

On competition from Chinese tech players like Huawei, Perillat welcomed the challenge. "Competition drives progress," he said. "Our way to compete is to be local — and to amortize global innovation across markets."

As Chinese brands eye global expansion, Perillat offered a word of advice: "Going global isn't just about exporting people or products. It's about building the right teams and processes — and having the patience to adapt."