Shanghai Automotive Industry Corporation (SAIC) will establish a research and development (R&D) center in Israel for advanced auto technologies, the company announced in China. The company said the center would focus on development and venture capital investment in “electrical propulsion, data networks, car sharing, and smart automated propulsion.” The center is part of a global plan in which the company is expanding its R&D worldwide. It recently opened a similar center in Silicon Valley.
Sources informed Globes that the company’s advance team is already in Israel, and that the company’s branch in Israel is slated to expand to 50 employees. It is believed that SAIC’s business in Israel will be located in the new management center of the Lubinski group in Meuyan Sorek. Lubinski has been the official importer for SAIC in recent years, and has sold several thousand units of the brand to date.
SAIC, a Fortune 100 company that is one of the four largest Chinese auto manufacturers, is a Chinese government company selling nearly five million vehicles a year.
The auto industry believes that this is only the spearhead of R&D and venture capital investment by Chinese auto manufacturers in Israeli auto-tech. Early this month, a new auto-tech entrepreneurship and innovation center owned by Chinese company Geely, with Volvo as a partner, was inaugurated in Israel. Globes previously reported that Qoros, jointly owned by Kenon Holdings Ltd. and Chinese auto manufacturer Chery, was planning to establish an R&D center for smart electric vehicles.
Incentives for Chinese firms
Under its five-year plan, the Chinese government is currently pushing all Chinese auto manufacturers to achieve technological breakthroughs in alternative environmentally friendly propulsion and smart cars as a condition for receiving substantial governmental incentives. The auto industry believes that the Chinese entry into the highly competitive and crowded field of global venture capital investment in smart cars will substantially boost the values of the current and future players in this segment.
In its announcement, SAIC said that Israel was a country with a deep historical and cultural background, and a strong atmosphere of innovation and entrepreneurship. The company noted that Israel was among the world’s leading countries in its per capita number of scientists and engineers, and that the contribution of high-tech companies to Israel’s gross domestic product put it among the world’s leaders in this aspect. SAIC said the Israeli government policy was to encourage technological activity with support from institutions, investment funds and other means in all areas of science. According to SAIC, many leading global technology companies, together with large auto manufacturers, are developing breakthrough technologies in Israel.
SAIC is currently in the middle of an “arms race” involving the five largest auto groups in China, including Dongfeng, Changan, FAW Group, and Guangzhou Automobile Industry Group, to obtain Western core technologies that will enable the Chinese to create a spearhead in global export markets. This task has not yet been accomplished. As part of this process, Chinese auto manufacturers have invested billions of dollars in buying Western auto companies and shares in them. In addition, major Chinese technology companies, including ZTE, are now trying to develop advanced components for smart cars, and are considered possible investments and acquisitions.
GLOBES (TEL AVIV, ISRAEL)/TNS