By on April 18, 2018

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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39 Comments on “China Plans to Open Car Market By 2022...”


  • avatar
    SCE to AUX

    “China Plans to Open Car Market By 2022”

    Sure, just at the same time solid state EV batteries hit mass production, and the ‘real killers’ of Nicole Brown Simpson and Ron Goldman are captured.

    • 0 avatar
      gmichaelj

      Agreed. 5 years – Plenty of time to walk it back, or put some other constraint on ownership.

    • 0 avatar
      threeer

      Not. Gonna. Happen. It’s almost comical when China gets up and pontificates about being the biggest proponent of free trade. What they really mean is “we love being able to trade OUR goods freely around the world while we mandate huge tariffs on YOUR goods, force you to join JVs and essentially steal your tech.” But yeah, it’s free trade.

      As has already been said, five years is a long time. Plenty of time to walk back any non-binding decrees made by the Emperor. Meanwhile, we’ll continue to run to Wal-Mart to add to the $300B annual deficit, all the while wondering why China is gaining world-wide influence as they spread the money around while crushing descent at home.

      • 0 avatar
        Big Al from Oz

        threer,
        I really think some of you far right nationalist economic Luddites extremists need to objectively look at the issues.

        You seem to only look at US companies within the US.

        Here’s some food for thought. Imagine the uproar by you Luddites if Chinese business controlled 1 in every 30 dollars spent in the US, with Chinese operations in the US. US business in China makes around $300 billion a year. The Chinese don’t have a footprint in the US like the US has within China.

        So, you Luddites should really pull your heads out of your asses and realise the Chinese have some ammunition as well.

        I have yet hear you whine and snivel about Trump increasing government debt, which is put on the same ledger as imports. How much will government debt inrease this year?

        So narrow, limited and uneducated you are.

  • avatar
    Art Vandelay

    interesting

  • avatar
    TW5

    There have been a couple of reasons presented to the public for China to scrap the JV requirement. First, we have a president who is keen to retaliate if China maintains protectionist regulatory regimes or continues manipulating international exchange rates. I’m not sure what is going on behind the scenes since Trump likes to assure everyone that he and Xi are great friends. Regardless, liberalization is happening.

    Second, and more importantly, the 50% quota was actually hurting the Chinese automotive industry. The joint ventures were so lucrative that many domestic manufacturers stopped caring about their products and marketshare began a two-decades-long decline. The Chinese manufacturers have simply stopped competing. Even their knockoffs are less impressive than they once were. As a result, Chinese car buyers see domestic brands as less desirable, and some of the domestic manufacturers, like Geely, are demanding an end to the joint venture mandate.

  • avatar
    thornmark

    China will never let the western cos dominate – they are merely stealing tech and knowhow

    Cadillac and Buick will wither away

    did anyone expect anything different?

  • avatar
    cardave5150

    Perhaps the Chinese making have learned/stolen enough to be able to compete technologically on their now, and the JV’s are no longer as useful??

  • avatar
    cardave5150

    Perhaps the Chinese making have learned/stolen enough to be able to compete technologically on their now, and the JV’s are no longer as useful??

  • avatar
    brn

    Why 2022? Why can’t the market open up sooner? All you need to do is stop doing something.

    • 0 avatar
      RHD

      Maybe China will close down their prison slave labor manufacturing facilities, too. There is hope, since they have now ostensibly banned the importation of ivory.
      Next there will be a new, open-minded and 21st Century respect for all aspects of human rights. And the modern new Chinese-built roads in the jungles of timber-rich Pacific islands and mineral-rich African countries will be built to promote access to healthcare for the needy, instead of facilitating environmental destruction and the pillaging of natural resources for export.
      And that most vile and dangerous of dastardly villains, the Dalai Lama, will be allowed to return to Tibet.

    • 0 avatar
      Big Al from Oz

      brn,
      The Chinese have the same issues as the US in vehicle protection.

      Can the US change overnight as well, ie, remove the 25% chicken tax and start using the UNECE vehicle design regs?

      • 0 avatar
        DenverMike

        @BAFO – USA and UNECE regs are basically the same now. You squawk “protection”, but can never tie that in with anything real.

        Or show some actual examples of world/global cars or trucks we’re actually shielded from..

        Or even one!

        • 0 avatar
          Big Al from Oz

          NO DenverMike. I do not need to show you sh!t.

          • 0 avatar
            DenverMike

            Thanks for your response. So I take it you’re “special”, can blurt out all kinds of vague, yet bold statements, clearly theory based, but never has to back them up with anything factual, actual or reality based?

            This is mostly a car enthusiast forum, with a minor in politics, but you can’t come up with *one* car or trucks as an example for all your mind numbing rhetoric?

    • 0 avatar
      ra_pro

      It’s based on a 5-year plan

  • avatar
    Robbie

    The Chinese market will need cleaner and smaller cars than we can possibly provide. We will perhaps sell a few Mustangs to niche customers and a few Jeeps, but this will not magically make any Chinese drive a F150.

  • avatar
    dusterdude

    Great news — I’ll set my clock for 3.7 years from now..

  • avatar
    Big Al from Oz

    I do hope the Chinese free up their economy, especially with manufacturers.

    I again wonder if the Chinese will make the changes and force Trump’s hand to remove the Chicken Tax?

    • 0 avatar
      dantes_inferno

      >I again wonder if the Chinese will make the changes and force Trump’s hand to remove the Chicken Tax?

      The Chick-Fil-A bovines have armies of lobbyists in Washington to ensure the Chickens pay their fare share of taxes…

      • 0 avatar
        Big Al from Oz

        I do believe you might be correct.

        The best outcome would be for the Chinese to drop their 25% import tax on vehicles whilst the US drops the 25% Chicken Tax and the 2.5% vehicle import tax on cars.

        • 0 avatar
          DenverMike

          The Chicken tax only hangs around to leverage Europe’s Chicken tax. There’s no other reason for it.

          Without it, nothing worth mentioning would change in the US midsize truck scene.

          • 0 avatar
            Big Al from Oz

            DenverMike,
            I don’t believe the EU is reknown for pickup truck manufacture.

            Asia is.

          • 0 avatar
            DenverMike

            Thanks for your response. Yes Europe isn’t known for pickup production, so I take you’re saying their Chicken tax has nothing to “protect”, right?

            There is Euro van production to protect. And the EU has successfully shaped their market heavily preferring vans to pickups.

            Still that doesn’t mean Europe isn’t succeeding in isolating and protecting itself from USA (and global) pickups and vans, for the most part.

            Europe’s vibrant “grey market” clearly shows the vehicles available through very limited legal/legit imports don’t satisfy European consumer “demand”.

  • avatar
    dantes_inferno

    >China Plans to Open Car Market By 2022

    …for those flying spaceship vehicles predicted in the 1950’s….

  • avatar
    bobmaxed

    Nice looking Focus. When will we get it here. Not interested in China’s problems.

  • avatar
    cdotson

    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.

    • 0 avatar
      Big Al from Oz

      cdotson,
      I can see the Chinese relenting with the 50% stake in auto manufacturers, but not so much with the 25% import tax. And UNECE vehicle regulations are an issue hampering vehicles allowed on US roads.

      The US will need to greatly relax the 25% Chicken tax and allow UNECE regulated vehicles in.

      • 0 avatar
        DenverMike

        @BAFO – USA and ENECE regulations are basically the same now. You’re simply overstating their “differences” (ad nauseam).

        The Chicken tax will remain until Europe agrees to drop their Chicken tax. There’s no other reason for its existence.

        • 0 avatar
          Big Al from Oz

          DenverMike,
          I did not state anything about differences in the regulations.

          I was talking straight regulatory barriers of UNECE vehicles able to be registered to drive on US public roads.

          The UNECE regulations are that flexible we can allow US regulated vehicles to drive on our roads. It’s done in the EU, Australia and now Korea.

          So, the US should allow UNECE vehicles to operate on US roads with no barriers stopping them.

          • 0 avatar
            DenverMike

            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.

  • avatar
    dwford

    Is any part of that photo real?

  • avatar
    phila_DLJ

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

  • avatar
    Asdf

    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.

    • 0 avatar
      Big Al from Oz

      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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