China auto market regulation may change

mmpleaser

China is world largest auto market  24mm vs 17mm US.
Since 1994, China requires any foreign car makers to own no more than 50 % of the joint venture.
It gives local partner a big profit without any major effort on their part.  There goes the dilemma.
Yes Chinese workers are getting transfer of manufacturing technology from foreign car makers, speeding up the development of their auto industry, giving foreign car maker big market share of local market, also profit for local partners.

As a matter of fact, study indicates the profit margin of cars sold is GREATER than US, Europe and Japan.
Do not forget that to produce same car for another market by scaling does not cost more development costs, just more profit.

However, now China is thinking of removing the local content in auto market.  That is , no need to joint venture with Chinese local partner.
Two outcome could turn out.

Foreign makers will get ALL the profits from their car sales.  Local car makers by their own will collapse with no market at all, due to inferior quality.

Or Local car makers are standing on their own and prosper with their OWN innovation that were not encouraged since foreign car makers were spoon feeding the joint venture with technology that they do not or get lazy in innovation and less R & D.

Surely hope the latter will come true and puts the true Chinese car makers on a equal footing without relying on outside help.

The time has come for Chinese to stand up on their own.