Competition on the Chinese car market is tougher than ever, but German carmakers Volkswagen, Mercedes and BMW all said they aim to win a stronger presence there at the start of the Beijing Motor Show on Thursday.
Mercedes-Benz chief executive Ola Källenius expressed confidence that the company could cope with competitive conditions in the Chinese market in remarks to journalists at the officially-named 2024 Beijing International Automotive Exhibition.
"We are not standing still," Källenius said. Mercedes-Benz could keep up with the rapid pace of technical progress in China, he added.
Although Chinese manufacturers are increasingly trying to gain a foothold in the premium segment, BMW boss Oliver Zipse said his company can cope.
"We are firmly convinced that we will continue to invest in China and contribute to the further expansion of German-Chinese co-operation," Zipse said at the motor show.
Shortly before the start of the trade fair, Volkswagen said it will continue to press ahead in its race to catch up in the Chinese market for electric cars.
"We are running at high speed to improve in this segment," Volkswagen Group boss Oliver Blume said on Wednesday.
VW is focusing on technology and costs in preparing to take on Chinese e-car makers.
The Beijing Motor Show, among the most important in the world, shows where the sector is heading. This year, multifunctional vans look set to be popular in China, and Mercedes plans to launch an electric version, the head of its transport division, Mathias Geisen, told Germany's Wirtschaftswoche magazine.
Alongside entertainment, Chinese carmakers also offer ever higher levels of comfort, with features such as massage functions on the rear seats, with the focus more on passengers than drivers.
The sector is also continuing to focus on autonomous driving.
But the price war is raging between makers of electric cars in China, with few suppliers profitable in this area.
That comes amid concerns in Europe and the US that China is fuelling overcapacity in this area through subsidies and Brussels is investigating market distortions as Chinese e-cars cost less than their European counterparts.
Despite their show of confidence, German carmakers face powerful rivals in China, such as southern Chinese company BYD, the market leader for e-cars in China. BYD is presenting a whole range of new models, including an e-car costing the equivalent of less than $10,000.
Many other young Chinese e-car start-ups vying for a share of the market are also presenting their vehicles at the fair.
Xiaomi, known as a maker of mobile phones, is also drawing interest at the fair, having presented its first electric car in March.
Other companies known from other industries, such as telecoms firm Huawei or Baidu, are also entering the market.
Trade policy is a further area of focus at the trade fair, as tensions over subsidized Chinese export goods on foreign markets and industrial overcapacity have been a major concern in the EU and the US.
Beijing's state investment keeps prices artificially low, placing EU and US firms at a disadvantage.
The European Commission has been investigating whether electric cars in China are benefiting from illegal subsidies since last year.
According to the commission, Chinese electric cars are normally around 20% cheaper than models built in the EU.
The anti-subsidy investigation could now lead to punitive tariffs being imposed.
But German car manufacturers are against such tariffs and Mercedes boss Källenius also spoke out clearly against the prospect.
"You can't be naive, there have been protectionist tendencies here and there over the last five, six or seven years," he said.
"In my opinion, the economic players who benefit most from open markets are not well advised to move in the direction of protectionism," he said.
He called for more effort to be made to establish equal opportunities between the two. "The attitude must be: open and don't close."
