Independent Operation of Foreign Auto Parts Is Banned
Posted: 08/25/2014 09:08:41 Edited: 08/25/2014 10:08:41 Clicks: 3053
According to foreign media, German auto parts maker ElringKlinger recently received an interview and expressed that Chinese government has asked three German car parts manufacturers to stop independent operation in Chinese market. They must seek local partners to jointly set up a joint venture before continuing business in Chinese market.
Stefan Wolf, the CEO of ElringKlinger Company, told Stuttgart Daily, “The Chinese government has notified several German automotive parts manufacturer not to continue independent business in China through subsidiaries. These companies must set up joint ventures with local Chinese companies in the future.”
According to Wolf, there are already three German car parts makers who need Chinese partners to continue doing business in China, but he did not disclose details of these enterprises. In addition, Wolf stressed that ElringKlinger has not been affected by this decision. In response to these messages, Robert Bosch and Continental AG, two of Germany's largest auto parts maker, haven’t commented immediately.
Earlier this month, the European Union Chamber of Commerce in China expressed concern about the series of antitrust investigations carried out by the Chinese government recently. The EU Chamber of Commerce in China believed that Chinese government was alleged to use coercive administrative measures in order to stop unfair treatment of foreign companies. China's National Development and Reform Commission recently conducted anti-monopoly investigation of auto part brands and launched heavy penalties to monopolistic companies. Previously, China's official media reported the presence of foreign car brands monopoly in Chinese market. Thus, Chinese consumers should pay artificially high costs to buy cars. European car brands including Audi, BMW and Mercedes-Benz have announced price decline of new cars and parts in response to the investigation.
According to regulations released by Chinese government, foreign auto companies must set up joint venture with local companies, while the ownership proportion of foreign companies can not exceed 50%.
Stefan Wolf, the CEO of ElringKlinger Company, told Stuttgart Daily, “The Chinese government has notified several German automotive parts manufacturer not to continue independent business in China through subsidiaries. These companies must set up joint ventures with local Chinese companies in the future.”
According to Wolf, there are already three German car parts makers who need Chinese partners to continue doing business in China, but he did not disclose details of these enterprises. In addition, Wolf stressed that ElringKlinger has not been affected by this decision. In response to these messages, Robert Bosch and Continental AG, two of Germany's largest auto parts maker, haven’t commented immediately.
Earlier this month, the European Union Chamber of Commerce in China expressed concern about the series of antitrust investigations carried out by the Chinese government recently. The EU Chamber of Commerce in China believed that Chinese government was alleged to use coercive administrative measures in order to stop unfair treatment of foreign companies. China's National Development and Reform Commission recently conducted anti-monopoly investigation of auto part brands and launched heavy penalties to monopolistic companies. Previously, China's official media reported the presence of foreign car brands monopoly in Chinese market. Thus, Chinese consumers should pay artificially high costs to buy cars. European car brands including Audi, BMW and Mercedes-Benz have announced price decline of new cars and parts in response to the investigation.
According to regulations released by Chinese government, foreign auto companies must set up joint venture with local companies, while the ownership proportion of foreign companies can not exceed 50%.
