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The Ministry of Industry and Information Technology has made it clear that further opening up the automobile market will speed up the merger and reorganization of the industry.

2024-05-30 Update From: AutoBeta autobeta NAV: AutoBeta > Industry Report >

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Following the announcement of the opening schedule of the joint venture stock ratio, the Ministry of Industry and Information Technology once again announced the opening of the automobile market. A few days ago, Huang Libin, spokesman for the Ministry of Industry and Information Technology, said that in the future, telecommunications, Internet, automobile and other fields and related fields will be further opened to foreign investment, so as to continue to improve the level of intellectual property protection and create a good business environment.

Huang Libin also said that China will unswervingly open wider to the outside world, treat the issue of Sino-US trade frictions with an open mind and tolerant mind, do not carry out construction behind closed doors, blindly emphasize "self-control", and will not decouple from international industrial development.

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The national policy protects the development of China's automobile industry and gives independent car brands room for development, but market opening is a major trend, and some independent brands that fail to fully adapt to the market competition environment will usher in a big reshuffle.

As early as April 2018, the National Development and Reform Commission issued a relevant announcement, making it clear that the restrictions on foreign equity ratio of special purpose vehicles and new energy vehicles will be lifted in 2018; the restrictions on foreign equity ratio of commercial vehicles will be lifted in 2020; and the restrictions on foreign equity ratio of passenger vehicles will be lifted in 2022. At the same time, the restriction of no more than two joint ventures will be lifted. It means that through the five-year transition period, the automobile industry will completely abolish the restrictions on foreign equity ratio.

Li Shufu, chairman of Geely, once said in an interview with the media that there are hundreds of Chinese auto companies, and eventually there will not be many left behind. "over the past few decades, state policy has indeed protected the development of China's automobile industry. Previously, the prices of Chinese auto products were the most expensive in the world, but after the opening of joint venture shares, China's auto market will be more open. China's car prices will become the cheapest in the world." Li Shufu also said that this policy is not only conducive to the self-awakening and self-struggle of China's automobile industry, but also helps to improve the competitiveness and R & D level of Chinese brand cars, provide users with more and better products, and constantly increase market share. Moreover, with the opening of the joint venture stock ratio, the new way of competition will participate, and the merger and reorganization of the industry is inevitable.

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So far, brilliance BMW has decided to change its joint venture stock ratio, increasing its stake in brilliance BMW from 50% to 75%. As part of the agreement, brilliance's contract will be extended to 2040 after it expires in 2028. South Korea's Hyundai Motor is considering increasing its stake in the Chinese joint venture Sichuan Hyundai Motor Co., Ltd., and acquiring a 50% stake in Sichuan Hyundai held by China's Nanjun Automobile Group, turning Sichuan Hyundai into a wholly foreign-owned enterprise. In addition, Tesla's Shanghai factory was completed and put into operation, and it is also the first wholly foreign-owned enterprise in China.

With the expansion of China's opening up of the automobile market, the advantages of foreign brands will become more prominent. coupled with the fact that the automobile market has entered a cold winter, the living space of independent enterprises has been further compressed, the competition they are facing has intensified, or they have accelerated their mergers and restructurings. at the same time, bankruptcy may also become the norm.

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