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Eased Foreign Ownership Rules Could Kill China’s Car Brands
Domestic car brands in China may be wiped out if the government relaxes rules on foreign ownership.
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Domestic car brands in China may be wiped out if the government relaxes rules on foreign ownership.
So says the state-backed China Assn. of Automobile Manufacturers. It warns that foreign carmakers could leverage their global supply chains and exert pricing pressure that would "kill Chinese brands in the cradle."
Current investment rules cap foreign ownership of assembly operations to 50%, thus forcing foreign carmakers into partnerships with domestic producers. But last October a commerce ministry official told Chinese carmakers they should prepare for the time when they won't be so well shielded.
CAAM reported earlier this week that the share of sales in China controlled by domestic carmakers fell nearly five percentage points to 38.4% in January. Overall sales of passenger vehicles climbed at least 7%.
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