Overseas car companies regain their joint venture strategy to calmly deal with the joint venture to reproduce

In 2000, the annual sales of Chinese cars were 2 million, and ten years later, this number increased to 18 million. Although the Chinese automobile industry is not prepared for technology, it has developed miraculously due to the huge market capacity. With China becoming the world's largest auto consumption market, overseas car companies can no longer resist the temptation of this huge market. Some transnational giants who once lost interest in the Chinese market have come back and regained their joint venture strategy. Some of them hope to open up in China. Second, some hope to make breakthroughs in China for the first time. At the same time, domestic automobile companies also intend to take this opportunity to learn from each other.

Renewed joint venture trend According to US media reports, Jeep brand CEO said that he recently went to China to talk with the Guangzhou Automobile Group, hoping to negotiate deals with Chinese auto companies in the near future, so that Jeep models can be produced locally in China. At the same time, although the joint venture project of Chery and Subaru, which has attracted much attention, has failed to pass the approval of the National Development and Reform Commission, the news that Chery and Jaguar Land Rover have waited for the review has been met. In addition, Beijing Auto, Jiangling, Lifan and other car companies also performed very actively in this round of competition for foreign auto resources.

Jeep is by no means a case. More overseas auto companies have accelerated the pace of joint ventures. From last year, Chery and Quantum, Changan and PSA, JAC and Navistar, BYD and Mercedes, GAC and Fiat, Foton and Daimler etc. Both have established joint ventures and started a new journey in the Chinese market.

In the era of planned economy in the 1980s, to promote the development of China's automobile industry, the government led SAIC, FAW, Dongfeng, Chang'an, and other automobile groups and transnational automobile giants to form a group of the earliest Sino-foreign joint venture automobile companies. Today, domestic and foreign large-scale powerful car companies have almost fully owned joint ventures in China. According to statistics, by the year 2000, China had established 10 vehicle joint ventures, and from 2002 to 2009, there were 229 newly-established automobile joint ventures, including 42 vehicle companies and 126 parts and components enterprises.

In the ten years, the automobile joint venture turbulent, with the rapid rise of Shanghai GM, Dongfeng Nissan, GAC Toyota, and Fiat’s sudden exit. In 2008, when the global financial crisis occurred, the outstanding performance of the Chinese market became the life-saving straw for the global auto giants. In the context of the weak global economy, the rapidly developing Chinese economy has driven the growth of the Chinese auto market. In order to get more fruit from this growing tree, international auto companies that did not catch up with the first wave of joint ventures have started or accelerated their localization plans. This round is a niche or luxury brand, while the Chinese joint venture is a relatively small independent brand enterprise.

Technology as the main appeal The foreign giants are looking at sales that can be significantly boosted after a joint venture, and the resulting “money scene” in the Chinese auto market. Only through joint ventures can they quickly achieve large-scale production by bypassing excessive tariffs. While domestic auto companies are looking at the technology of multinational car companies, joint ventures may be a threshold that must be passed on the road to becoming bigger and stronger.

In the first wave of joint ventures, China's automobile manufacturing industry has a large gap with foreign advanced automobile production. Therefore, attracting multinational car companies to invest in China in a market-for-technology way has become a shortcut. This short-cut is characterized by: foreign control of models and technology, China provides it with production and markets, the two sides set up a joint venture in accordance with the ratio of 50:50. Some people commented that joint ventures and cooperation have opened the door to the integration of China's auto industry into the world's industrial system. However, some people hold negative opinions. They believe that the market does not exchange technology, nor can it replace technology. The Chinese large-scale auto group eventually becomes only a multinational company. As an assembly plant, China's auto industry does not possess core technology. Unprotected markets will eventually become the world of multinational corporations.