China has announced that it will allow full overseas ownership of automotive companies in the country from January 1, 2022, according to a release by the country’s ministry of commerce and the National Development and Reform Commission.
Since 1994, foreign companies looking to enter China’s automotive industry have been required to set up as 50:50 joint venture with a local company to operate. Examples include FAW-Volkswagen, SAIC-VW, Changan Ford, SAIC-General Motors, GAC Mitsubishi, FAW Toyota, GAC Toyota, Beijing Benz (with BAIC), Dongfeng Honda, Guangzhou Honda (with GAC), BMW Brilliance and Changan Mazda.
The lifting of foreign-ownership limits will allow overseas companies to have full ownership of vehicle brands, freeing up investment in some of the biggest carmakers in the world. Additionally, foreign investors will no longer be limited to a maximum of two joint ventures in China, which was the case previously.
The latest move by the Chinese government comes a few years after it loosened the maximum ownership rate to 70% in 2018, which saw BMW largely take over its joint venture with Brilliance Auto Group. That same year, Tesla was given extraordinary permission to build a wholly owned factory.
With this announcement, newer brands like Rivian and Lucid will have access to the world’s largest passenger car market without having to find a local partner. Meanwhile, existing carmakers in the country can opt to take over their joint ventures completely, or their Chinese partners can withdraw from their joint venture.
As reported by Forbes, China’s joint venture schemes were designed to allow local brands to keep more of their profits and technologies in the country. The five biggest automakers in China – SAIC, FAW, BAIC, Dongfeng and Shangan – are all state-owned.
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sounds like the State needs cashflow. China economy red light imminent?
Non-chinese car manufacturers need China more than China needs them. Besides, allowing 100% ownership does not mean they will compete on equal terms (look at MY market). Legislation will be in place to allow local manufacturers to grow stronger.
Japan and Korea’s domestic market is dominated by local manufacturers, the same will be the case in China. We will see Chinese brands getting stronger in the export market in future.
To your original post, I think this has little to do with “China needing cashflow” as almost all the major manufacturers are already in the chinese market.
Yeah, cash flow is vital to maintain its military might.
Yes malusia kowtow’ed to abang besar China,
Wrong. All kowtow to money because cash is king.
China is removing the protectionism…Meanwhile in Malaysia, Perodua & Proton is still enjoying preferential treatment compared to other car imports.
Proton owned by Geely, so what?
Protong is still 51% owned by DRB,but beacuse it can go bankrupt without Geely,Geely with 49% bring in the right handed versions of China cars..is calling the shots.
Without Geely,you can expect another Rm20 billion in bailout funds.
Geely is only the shareholding strategic partner, not full owner of Proton.
Even communist if more transparency than Malaysia! Bolehland will need tongkat forever!
Naza Ria – first national MPV,
https://www.thestar.com.my/news/nation/2003/08/28/pm-launches-first-national-multipurpose-vehicle
RM98,888 2.5L V6.
Everybody got chance. But many not able to be a quality durable peace of mind game changer.
confirmed. china is the biggest economy on earth. fear not. other economies rely on china most
Its major property developers are trying to settle their huge debts. Maybe they thought biggest economy = huge debts, when it comes to the global free market economy
Habislah ketuanan Cina di China.
Ketuanan duit dah kini berleluasa. Cash is king.
no more shanghai da zhong