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January 4, 2022updated 21 Jan 2022 1:16pm

China allows foreign ownership of car manufacturing

Restrictions on foreign ownership stakes in Chinese JVs are now officially ended.

By David Leggett

The Chinese government now allows full foreign ownership of passenger car manufacturing in the country, from the beginning of 2022, according to local reports citing a release by the country’s main economic planning agency

The Ministry of Commerce and the National Development and Reform Commission’s annual industry policy statement, released on Monday, did not include passenger car manufacturing as an industry off-limits to foreign-owned companies. Until last year, the foreign ownership limit for vehicle manufacturers was 50%.

The previous version of the annual statement, the 2020 edition released a year ago, had already confirmed that foreign ownership regulations in the automotive industry would change in 2022 as part of the country’s gradual relaxation of foreign ownership regulations in the country.

US electric vehicle (EV) maker Tesla is the only foreign automaker so far to own 100% of a Chinese vehicle manufacturing operation, its Shanghai manufacturing plant which began production at the end of 2019 – mainly because it was a new investment and because it is located in a special economic zone.

Back in 2018 German automaker BMW, already anticipating changes in foreign ownership regulations, announced plans to increase its stake in its BMW Brilliance Automotive Ltd joint venture from 50% to 75% in 2022.

 

 

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