China Plans to Open Car Market By 2022

Matt Posky
by Matt Posky
china plans to open car market by 2022

After weeks of unpleasant trade talk and posturing between Washington and Beijing, China’s lead economic planner announced the country would be easing limits on foreign ownership of automotive ventures. While an official metric was not posted, it will be less than the current 50-percent cap non-Chinese automakers have been limited to since 1994. But, for all we know, China may be seeking to scrap the mandate entirely.

We did, however, get a timeline. On Tuesday, the People’s Republic announced it would remove foreign ownership caps for companies making fully electric and plug-in hybrid vehicles this year — followed by commercial vehicle manufacturers in 2020 and the rest of the car market by 2022.

Nobody seems to be able to figure out why China decided to extend an olive branch. Presumably, it’s to alleviate the growing trade tension with the United States. But European automakers have just as much to gain, if not more, from the move. BMW sends more vehicles from the U.S. to China than anyone and Volkswagen sells the most cars inside the country through its joint-venture partnerships with FAW Group.

Ford and General Motors still move their fair share of metal, though — and a lot of it is built in China. Perhaps the nation’s government simply felt enough foreign automakers had made sufficient investments within the country already, and didn’t want to risk a full-blown trade war with the U.S. just to get a few more jointly owned factories. It’s not like anybody is going to abandoning the market anyway; the country is far too big for businesses to ignore.

We’re hoping China has more to say on the matter soon.

[Image: Ford Motor Co.]

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  • Cdotson Cdotson on Apr 19, 2018

    In addition to the 50% foreign ownership cap isn't there also a limit to the number of joint ventures any given automaker can form in China? I think it's only 2 per manufacturer. China must have realized that global manufacturer consolidation was pointing toward full market saturation in automotive joint ventures and figured it was a concession that could be made in negotiations that would appear significant but yield little.

    • See 3 previous
    • DenverMike DenverMike on Apr 20, 2018

      @Big Al from Oz Thanks for your response. UNECE regs aren't singled out. Even US built, US spec Mustangs can't be registered in the US if sold new in Canada or Mexico. But the point is we have the widest selection of cars and trucks, subcompacts to F-450 pickups. There's no real (or imagined) need to "grey market" import cars or trucks to the US. We had a legal grey-market until the late '80s, and the only thing anyone bothered with (or made sense) were super rare, Euro and Japanese sports cars or exotics, not imported to the US, (due to very low production) that lacked "catalytic converter" emissions. Australia is generous on grey-market car registrations, except LHD steering vehicles have to be RHD converted to operate on Oz roads. Foreign registered vehicles can operate/drive in the US no problem, even RHD.

  • Dwford Dwford on Apr 19, 2018

    Is any part of that photo real?

  • Phila_DLJ Phila_DLJ on Apr 19, 2018

    That Focus looks oddly photoshopped in place. Why isn't it casting any shadow?

    • See 1 previous
    • Corey Lewis Corey Lewis on Apr 19, 2018

      Looks like the floor is electronic and lighted, so the light coming from underneath is... trumping the shadows.

  • Asdf Asdf on Apr 19, 2018

    China is making a gamble that Trump will be a one-term president. Come 2022, the plan to open the car market will be silently dropped.

    • Big Al from Oz Big Al from Oz on Apr 19, 2018

      Asdf, No, that's the way we work in the West. They don't have elections and from what I'm reading (by economists) Trumps impact will have little impact on the Chinese economy. Remember the US can only squeeze China so much, the US and China are reliant on each other. The US'es standard of living is based on importing cheap products.

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