In order to further improve the level of opening up to the outside world, promote investment liberalization and facilitation. On 27 December, the Special Administrative Measures for Foreign Investment Access (Negative List) (2021 Edition) was issued, which abolished the restriction on foreign ownership in passenger car manufacturing and the restriction that the same foreign investor could establish two or fewer joint ventures producing similar vehicle products in China. Abolish the restrictions on foreign ownership of passenger cars, and accelerate the reshuffle of the automotive industry next year.
"Market for technology"
At that time, in the 1960s and 1970s, China's automobile industry was in its infancy, when the automobile industry had a thin foundation, the automobile factory had a limited level of manufacturing, and there were only two decent factories of Hongqi and Shanghai brand cars, so there was an extreme desire for automobile manufacturing technology. At that time, one of the suggestions was to "trade the market for technology".
From 1984 to 1985, the first batch of joint venture car companies including Beijing Jeep, Shanghai Volkswagen and Guangzhou Peugeot were established successively. At the same time, in order to protect the national automobile industry, the "China Automobile Industry Policy" was promulgated in 1994, which stipulates that foreign car companies can only have joint ventures with two domestic car companies at most, and the shares in the joint venture enterprises shall not exceed 50%, which is the beginning of the restriction on the joint venture share ratio.
The evaluation of the joint venture share ratio policy is mixed, but the positive effects are undeniable. In particular, the emergence of joint venture car companies has promoted the gradual establishment of supporting industries such as automobile supply chain and maintenance, and has trained a large number of engineers, management talents and industrial workers for the automotive industry, which is an indispensable foundation for promoting the development of the automobile industry.
Of course, there are also some joint venture car companies that have been "lying flat" to live a life, not only have not obtained technology, but also rely on the profitability of the joint venture brand for a long time to maintain business operations. For example, Brilliance Group, which has applied for bankruptcy reorganization. According to the data, Brilliance Group made a profit of 4.376 billion yuan in 2017, of which BMW Brilliance's contribution to the group's net profit was 5.238 billion yuan, that is to say, if there was no BMW Brilliance, Brilliance's profit was negative. For example, most of BAIC's revenue comes from Beijing Benz, and autonomy has always been a loss state.
Nowadays, China's automobile industry has made great progress, and the market environment and competitive strength have changed greatly. In April 2018, the new shareholding policy was released, announcing that the foreign equity restrictions on special vehicles and new energy vehicles will be abolished in 2018; the foreign ownership restrictions on commercial vehicles will be abolished in 2020; the foreign ownership restrictions on passenger cars will be abolished in 2022, and the restrictions on joint ventures will be abolished.
After the release of the gradual stock ratio news, some new joint venture brand forms continue to appear, injecting new vitality into the market. First of all, with the liberalization of the shareholding ratio policy, there is a great possibility that foreign-funded enterprises will abandon the Chinese side and go it alone. Previously, it was due to policy restrictions and had to adopt the form of joint venture between the two parties. After announcing the removal of foreign ownership restrictions on new energy vehicles in 2018, Tesla became the first auto company in China to build a wholly owned factory. Today, Tesla has truly become a true "catfish".
In the future, it is not excluded that more car companies will follow suit and go alone. For example, in 2018, Brilliance's share ratio changes, and BMW will own 75% of the shares in the joint venture. In 2020, after the establishment of JAC Volkswagen, Volkswagen accounted for 75%; Mercedes-Benz and BAIC are also discussing the topic of share ratio, and the new joint venture between Audi and FAW will also be a big change. Therefore, after the liberalization of the stock ratio, it is not disastrous for the national automobile industry, and independent brands have already had the strength to fight a war.
Secondly, now the environment of the domestic automotive industry has undergone great changes, the automotive industry dividend has gradually disappeared, there will no longer be a period of substantial growth, into the state of stock competition, at this time to choose a substantial increase in capital or independent work, is not necessarily a very wise choice. At this moment, it is more in the interest of both sides to choose to maintain the current state.
It is better to increase the share ratio than to re-select a partner. Foreign brands may re-choose brands with more growth potential, such as Geely, Great Wall and other brands. In 2018, Great Wall and BMW signed a joint venture agreement to jointly build the electric MINI brand - beam car. In January 2020, Geely and Daimler established a global joint venture of smart brand - Smart Motor Automobile; BYD Toyota Electric Vehicle Technology Co., Ltd., a pure electric vehicle research and development company jointly established by BYD and Toyota, and the two sides also have other cooperation in electric technology.
The rapid rise of private car companies has provided new choices for foreign brands, and has also accelerated the decline and elimination of some brands. Brands such as Suzuki, DS, Dongfeng Renault and other brands have withdrawn from the market and become a thing of the past. The resources of the automotive industry began to concentrate on the head brand, and car companies that did not conform to the new situation will be eliminated at an accelerated rate.
In addition, in the past two years, traditional independent brands have made great progress in the new energy track, especially the new power brands of car manufacturing. According to the data of the Association of Automobile Associations, the domestic retail penetration rate of new energy vehicles has reached 20.8% in November this year, of which the penetration rate of new energy vehicles in independent brands is 37.4%, and the penetration rate of new energy vehicles of mainstream joint venture brands is only 3.6%.
BYD's new energy sales have exceeded 90,000 vehicles, and the sales of new car-making forces "Wei Xiaoli" have exceeded 10,000. The recognition of the public release ID series is not high, and the sales volume has just exceeded 10,000. Therefore, in the new energy track, independent brands have advantages that foreign brands do not have.
Starting next year, with the official liberalization of the auto industry's stock ratio, it means that the knockout round has entered the countdown stage, and there is not much time left for those car companies that do not want to make progress and make money by lying flat.