CGTN: More in China, for more of China
"In China, for China", a catchphrase among auto executives at the Beijing Motor Show 2018. With policies for wider access, there will be "more in China, for more of China".
China will phase out joint-venture restrictions for foreign automakers in five years, and import tariffs are set to be cut soon. When full ownership is no longer a no-go, the question is whether to go solo or expand partnerships.
Peter Fleet, Asia Pacific President of Ford Motor Company, said they already own two strong joint ventures and are now working to gain regulatory approvals of a new joint venture with Zotye to develop a new range of battery electric vehicles.
However, wider market access means more competition - for example, the new breed of automakers claim their Internet mindset helps capture the digital generation.
Tesla is considered a benchmark for that group. It is expected to set up a fully owned China factory. That came as the country opens up its auto sector - that is, if Tesla can get over the current cashflow and supply snags.
Those are not top concerns for traditional automakers -they don't rely on rounds of funding from venture capitalists, and their long-term operation has built up strong supply chains. But they are more pressured on winning the tech race.
Jaguar Land Rover is teaming up with 5 Chinese companies in fields including telecom, mapping and autonomous driving. CEO of the company, Ralf Speth, said the project needs the involvement of all parties, including the government for the infrastructure, the academia to help to make the next further steps, and industries across sectors.
Meanwhile, tech firm Alibaba is playing a role in Ford's plan to reverse declining sales in China.
“I would say sales are off a little bit this year, as some of the vehicles approach the end of their cycle. But we have a huge wave of new exciting products, we’re bringing new features to market in our cars with our association with Alibaba,” said Peter Fleet. “We’ve gone public about the ambition to grow on revenue base by 15 percent by 2025.”
However, not all automakers would move in the direction of getting more joint ventures on board. “I think, honestly, the foreign automakers did need the support of a local partner for understanding the domestic market, understanding how to set up a dealer network, and also dealing with the government. So whether the foreign [auto] makers have really learned how to do that themselves or if it’s really worthwhile, that’s up to each one of them to decide,” said Doug Betts, Senior VP of Global Automotive Operations at J.D. Power.
As for the likes of Lamborghini, Porsche and Bentley, premium brands selling only imported cars in China, the upcoming tariff cut is a welcome move as dealers may not have to pass the savings on to consumers because the demand is so strong.
For now, auto imports and exports are only a fraction of total sales. Auto executives do not see a material impact from the China-US trade tensions, but the pressure on China's own auto brands is real. However, if competition creates a better quality of product, and diversity gets consumers' adrenaline running, a more mature Chinese auto market would move to the inside track of mobility.
