JAC and Volkswagen, Shanxi Automobile Group with SsangYong Motors, auto companies seem to open another round of joint-venture wave. Media also reports that BAIC Group will establish a joint-venture company with FCA Group. Indian auto company Mahindra is also seeking for cooperative partners in China, hoping to seize some market shares in alternative energy vehicle market.
However, the current Chinese market is quite different from the previous time. New entrants are facing more fierce market competition and stricter policy environment. During the new round of joint-venture wave, what characteristics will the cooperation show and what problems will they face?
Alternative energy vehicle market has more opportunities for joint-venture companies. Ye Shengji, Vice General Secretary of China Association of Automobile Manufacturers (CAAM) said that new construction for traditional oil-fueled companies will not be approved but opportunities in alternative energy vehicle market still exist. “Currently, Chinese alternative energy vehicle market has the fastest growth in the world. Foreign capitals also put great attention on Chinese market, exampled by Volkswagen and JAC’s cooperation. Besides, the nation is encouraging the approvals of alternative energy vehicles, which may be another hotspot.”
In fact, Chinese companies are facing their status upgrade in the cooperation. “Joint-venture companies in auto industry should experience periods of nationalization, local developments and exploring local brands.” Some experts said. In the past several decades, most joint-venture companies are simulating foreign brands and putting little efforts in exploring local brands. In the future, the cooperation should adopt a new way, which is more suitable for Chinese market, to deepen the cooperation and innovate cooperation model.
