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...”


Read all comments

Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

  • EBFlex: “ Yeah, that Taycan really sucks at about everything it tries to do. What a POS.” I mean….when a used...
  • EBFlex: Oh thank god. Now that this liberal mouth breather has fox all of NYCs problems, he can focus on the real...
  • namesakeone: Can you extend the life of the car by installing a replacement fuel cell?
  • Lightspeed: SUVs are not my thing, but the last time I drove a Tahoe was a 2018 rental with the 5.3L and I loved the...
  • Lou_BC: These bikes are unlicensed and unregistered, it might be possible to trace the owner once you had the bike...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber