By on February 21, 2014

China’s Ministry of Industry and Information Technology, in line with President Xi Jinping’s desire for opening the domestic economy to private and foreign investors, plans to relax restrictions on foreign ownership of joint ventures with local automakers in the face of those warning such a move would be the beginning of the end of the Chinese local auto industry.

Automotive News China reports the organization will join their fellow ministries in developing a plan to implement the proposed deregulation sometime in the future. Currently, foreign companies are mandated to form joint ventures with local companies in order to do business in China, while foreign shareholders are barred from owning more than half of said ventures.

Meanwhile, the China Association of Automobile Manufacturers, representing local interests, voiced their opposition in a statement following the announcement by ministry spokesman Xiao Chunquan:

Relaxing the current foreign ownership restrictions will wipe out Chinese brands. Foreign companies can totally use the competitive advantage of their global supply chains to support a price strategy to kill Chinese brands in the cradle.

The death spiral may have already begun, however, as Chinese consumers opt for foreign makes such as Buick, Volkswagen and Peugeot. Local brands lost 4.9 percent market share in 2013 from the year before, hovering around 38.4 percent as Volkswagen AG became the No. 1 foreign automaker over General Motors during a prosperous run by all foreign manufacturers bolstered by higher industry sales.

Get the latest TTAC e-Newsletter!

15 Comments on “China To Relax Restrictions On Foreign Joint Venture Ownerships...”



Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

  • Re: Question Of The Day: What Do You Drive?

    highdesertcat - What do I drive? – 2011 Tundra 5.7 SR5 DoubleCab Long Bed RWD with Factory Tow package and HD cooling. What do we own? – 2015 Sequoia...
  • Re: Question Of The Day: What Do You Drive?

    omer333 - And I forgot the 1991 Toyota pick-up I had for three months before I got the Ranger.
  • Re: Question Of The Day: What Do You Drive?

    MrIcky - ’14 Challenger RT with minor mods to make it more loud and obnoxious. This replaced an 09 Cobalt SS. Also, a ’07 Megacab. That replaced a...
  • Re: Question Of The Day: What Do You Drive?

    PrincipalDan - Yes I have one child now (4 month old/daughter) but my wife and I would like to have 3 or 4 total. I am a car nut but I don’t enjoy the process...
  • Re: Question Of The Day: What Do You Drive?

    omer333 - Alright, alright, alright… I’m currently driving a 2014 Dodge Dart SXT with the 2.4 litre engine and the 6-speed Powershift automatic....
  • Re: Question Of The Day: What Do You Drive?

    Cirruslydakota - Current: 2008 Mazdaspeed3 Sport Cosmic Blue Mica 104,000 miles 1999 Jeep Grand Cherokee Laredo 263,000 miles Past: 2008 Mazda3 2.3S 5 speed 2007...
  • Re: Question Of The Day: What Do You Drive?

    S1L1SC - It depends – Current fleet consists of: 1987 Chevy G20 Conversion van with 169,000 miles 1991 Buick Roadmaster Estate Wagon with 245,000 miles 1993...
  • Re: Question Of The Day: What Do You Drive?

    waltercat - Great question! Current daily drivers: ’14 Lexus ES350 (mine), ’12 Hyundai Santa Fe Limited 3.5L AWD (wife’s). Current toy: ’03...
  • Re: Question Of The Day: What Do You Drive?

    -Nate - Drum brakes that are grabby when cold but soft when hot are usually brake fluid soaked…. Re lined shoes are dirt cheap . I spun and rolled my beloved...
  • Re: Nair: Ford Hard At Work On F-150 Hybrid

    Big Al from Oz - Ford has realised the new 2015 isn’t a big a hit as it thought. Ram just bettered it (marginally) in the Motor Trend review and the Colorado...

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Jack Baruth, United States
  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Vojta Dobes, Czech Republic
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States