China announces new unified rules for new joint venture companies

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The first application for an automotive joint venture came in 1983, a brave American company called AMC thought that the Chinese market might be a good place to sell its Jeep Cherokee line up, by 1983 they had nailed the contract and were ready to build, a few months later Volkswagen got the similar deal and became the first car maker in China – with Jeep having to settle for first SUV maker. Over the past 27 years nearly every foreign large scale auto manufacturer has entered the Chinese market at some point, either successfully such as GM, VW, or Ford or entered, failed, and then been forever shut out such as Subaru and Renault.

The rules on automotive joint ventures entering China seem to be unknown at best and of course have to go through several different departments at different levels, so whilst cities will openly welcome manufacturers to land in their cities the national government maybe wary of adding strain to the market and the potential for an economic fall out should things turn sour. From January 1st 2012 a new set of standardized rules for all automotive producing joint ventures will be introduced, the new rules indicate that foreign manufacturers will have a closer cooperation with their Chinese partners and will focus on the development of joint technologies via the introduction of joint R&D facilities. The standardization will also benefit the end user, as joint venture companies will be forced to take a more active role in the sales and after sales segments to make sure that dealers are carrying out their demands.

About the author  ⁄ FrankF

Frank entered the automotive industry via his father's instructions. He grew up with cars around him, especially as his father was a major auto restorer, Frank's childhood was spent passing beers, tools and coffee to his father whilst he explained the ins and outs of engines. Frank now works in the Chinese car industry at a specific manufacturer.


  • I __ H a t e __ C h i n a
    November 20, 2011

    Is there any world class auto company still not in China? Then this new rule is meaningless because everybody who is anybody is already in China.

  • hk
    November 21, 2011

    It seems that you just make up your own story.
    It reads that ALL JV will follow the new rules, not just NEW JV……………………

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