(Yicai) April 17 -- Several foreign enterprises, including German chemical giant BASF, have further intensified their localization efforts and investments in China amid adjustments in the global economic landscape and increasing uncertainties.

The Chinese new energy vehicle sector is developing rapidly thanks to the huge size and enormous potential of its automobile market, making China a worthwhile place for investment, BASF's Vice President Xu Yibin told Yicai yesterday.

On April 14, BASF announced it will invest around EUR60 million (USD67.9 million) to build a second factory in Shanghai's Pudong New Area to expand its automotive noise, vibration, and harshness reduction components capacity, with operations likely to start in 2027.

About the uncertainties brought about by the US "reciprocal tariff" policy, Xu said that the products made by BASF in Pudong mainly rely on the domestic supply chain, with only some products imported. But the company is making adjustments to further optimize its local supply chain layout, he noted.

Mahle' localization rate in China has reached 90 percent, as some products still need to be imported for patent reasons, Shen Liangyu, China president at the German auto parts supplier, told Yicai. But in the current environment, customers are very proactive in promoting localized procurement.

"There are ready-made supplier chains available domestically, and we can make the switch, but we need to conduct verification first," Shen explained. "Therefore, this can be a great opportunity to turn a crisis into a chance."

Louis Dreyfus established a global research and development center in Pudong in 2023, said Chen Jiayuan, chief executive officer of Louis Dreyfus North Asia and general manager of the North Asia Grains and Oilseeds Platform. This center aims to promote innovation developed in China to international markets, benefiting consumers worldwide, he noted.

"In today's complex and highly uncertain world, businesses must seek certainty by formulating long-term development plans," Chen pointed out, adding that the immense growth potential of the Chinese market and the high degree of certainty in its energy transition, green sustainability, intelligent development, and digital transformation fields, is crucial.  

Forvia Hella is further accelerating its localization efforts, particularly in the procurement and application of chips, said Bai Binyi, executive vice president of the international automotive supplier's electronics division in China. This initiative began last year and will be vigorously promoted to expedite the process, he added.

Nearly 40 percent of Burckhardt Compression's sales come from China, according to Li Simin, president of the Swiss reciprocating compressor manufacturer's Chinese business. In the next two to three years, Burckhardt plans to focus on researching and developing ultra-high-pressure compressors in China and promote their production and manufacturing in the country, Li noted.

Editor: Futura Costaglione