Au­tomak­ers get ex­tra mileage from re­forms

Shanghai Daily - - BUSINESS - Hu Yumo

China is al­ready the largest auto mar­ket in the world, and steps to open that mar­ket wider will re­shape the in­dus­try for years to come.

“China has ba­si­cally opened up man­u­fac­tur­ing with a small num­ber of ex­cep­tions in au­to­mo­biles, ships and air­craft,” Xi Jin­ping told a fo­rum ear­lier this year. “Now these in­dus­tries are also in a po­si­tion to open up. We will ease, as soon as pos­si­ble, for­eign eq­uity re­stric­tions in these in­dus­tries, au­to­mo­biles in par­tic­u­lar.”

A big fo­cus this year has been China’s pledge to phase out share­hold­ing lim­its for for­eign in­vestors in the au­to­mo­bile in­dus­try. The Na­tional De­vel­op­ment and Re­form Com­mis­sion has al­ready an­nounced that all re­stric­tions will be eased in the next five years.

Specif­i­cally, China will re­lax re­stric­tions this year on the size of stakes for­eign au­tomak­ers can hold in joint ven­tures re­lated to new-en­ergy and spe­cial-pur­pose ve­hi­cles. In 2020, it will ease for­eign own­er­ship lim­its in joint ven­tures that pro­duce com­mer­cial ve­hi­cles. In 2022, the re­stric­tions will be scrapped on car ven­tures, along with the rule lim­it­ing for­eign au­tomak­ers to no more than two ven­tures with Chi­nese part­ners.

Car im­ports will also ben­e­fit from dereg­u­la­tion. Sales of im­ported ve­hi­cles have been ris­ing rapidly in re­cent decades. About 1.2 mil­lion au­to­mo­biles were im­ported in 2017, with sales value ex­ceed­ing US$45 bil­lion. That was an in­crease of al­most 17 per­cent from a year ear­lier, ac­cord­ing to the China Au­to­mo­bile Deal­ers As­so­ci­a­tion, and a five­fold in­crease from 2006.

The on­go­ing China In­ter­na­tional Im­port Expo has spot­lighted the gov­ern­ment’s com­mit­ment to open its mar­kets wider to the out­side world. The pres­tige ex­hi­bi­tion al­lo­cated over 30,000 square me­ters for ve­hi­cle and car-re­lated prod­ucts and tech­nolo­gies. Sev­enty au­tore­lated ex­hibitors from 17 coun­tries and re­gions par­tic­i­pated in the event.

Some of the big­gest at­ten­tion-grab­bers at the expo are elec­tric cars, au­tonomous­driv­ing ve­hi­cles and fuel-cell cars.

Multi­na­tional play­ers in China’s auto in­dus­try haven’t been daunted by slow­ing sales. They still view the na­tion as a mass mar­ket ripe with op­por­tu­ni­ties and fu­ture growth.

US and Eu­ro­pean car man­u­fac­tur­ers such as Gen­eral Mo­tors, Volk­swa­gen and BMW dis­played elec­tric ve­hi­cles, au­ton­o­mous-driv­ing ve­hi­cles and in­tel­li­gent and con­nected cars dur­ing the expo. Ja­panese au­tomak­ers such as Toy­ota and Honda, as well as South Korean com­pany Hyundai, brought along their lat­est tech­nolo­gies in fuel-cell cars in re­sponse to the tight­en­ing Chi­nese reg­u­la­tions on auto emis­sions.

Pace­set­ter

China is no longer just a pro­ducer of au­to­mo­biles, but also a lab­o­ra­tory for new tech­nolo­gies. Its cut­ting-edge re­search and de­vel­op­ment are draw­ing no­tice from global play­ers, who care­fully mon­i­tor trends in the Chi­nese in­dus­try.

“Dur­ing the last four decades, Chi­nese so­ci­ety has been mas­sively trans­formed,” said Jochem Heiz­mann, pres­i­dent and chief ex­ec­u­tive of­fi­cer of Volk­swa­gen Group China. “To­day, China is a leader in the global switch to new-en­ergy ve­hi­cles, dig­i­tal­iza­tion, con­nec­tiv­ity and ar­ti­fi­cial in­tel­li­gence. China is able to adapt fast, act in an en­tre­pre­neur­ial fash­ion and rely on ed­u­cated young peo­ple.”

He added: “Volk­swa­gen is al­lo­cat­ing 15 bil­lion eu­ros (US$17.1 bil­lion) by 2022 for new tech­nolo­gies.”

At the im­port expo, Volk­swa­gen is pre­sent­ing a lineup of 25 mod­els in seven brands, in­clud­ing the Audi e-tron, the com­pany’s pre­mium, new-en­ergy ve­hi­cle.

Volk­swa­gen said that it will of­fer the Audi e-tron as an im­port model in China next year. The car­maker also plans to lo­cally pro­duce the model with joint ven­ture part­ner FAW-VW in 2020.

US au­tomaker Gen­eral Mo­tors is show­cas­ing its Buick En­spire all-elec­tric SUV con­cept, the Chevro­let Bolt EV and the Cadil­lac CT6, with “su­per cruise,” hands­free driver-as­sisted tech­nol­ogy. It is also dis­play­ing vir­tual ex­pe­ri­ence with the state-of-the-art Cruise AV au­ton­o­mous ve­hi­cle.

Matt Tsien, pres­i­dent of Gen­eral Mo­tors China, praised the expo as a plat­form for the com­pany to in­tro­duce its most ad­vanced tech­nolo­gies and prod­ucts.

“Our com­mit­ment to China is long term,” he said. “We are work­ing with our part­ners to im­ple­ment our plan to lead the trans­for­ma­tion of per­sonal mo­bil­ity through solid progress in elec­tri­fi­ca­tion, con­nec­tiv­ity, au­ton­o­mous driv­ing and shar­ing. By par­tic­i­pat­ing in the im­port expo, we are de­liv­er­ing a clear mes­sage that the vi­sion we are pre­sent­ing will be­come re­al­ity sooner than peo­ple think.”

Ital­ian com­mer­cial ve­hi­cle man­u­fac­turer IVECO said the expo presents prospects for the com­pany to “em­bark on new for­eign op­por­tu­ni­ties.”

IVECO en­tered in Chi­nese mar­ket in 1985 and of­fers a full range of ve­hi­cles pow­ered by nat­u­ral gas, from light to heavy trucks, and buses. The com­pany show­cased its com­mer­cial ve­hi­cle pow­ered by nat­u­ral gas dur­ing expo, call­ing it a part­ner in gov­ern­ment ef­forts to de­fend the blue sky.

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