China’s notoriously fragmented car industry, which has more than 70 registered carmakers yet is dominated by foreign companies, could be changing.
The first sign is the expected deal between Guangzhou Automobile Group and Chery Automobile to share technology as well as cooperate on sales and marketing.
Go deeper with GlobalData
Chinese media reports said the deal involves sharing engines and platforms but does not involve equity stakes or the joint ventures both have with foreign carmakers.
Although Beijing has been pushing its car industry for years to consolidate to improve competitiveness, there has been resistance as year on year sales growth has continued. There has also been resistance from regional governments, many of whom have a stake in local car companies, because they fear jobs would be lost.
Although there have been small mergers and takeovers in the past, there have been few collaborative agreements.
“Consolidation is the way to go for China, but it is a time-consuming process because it involves various stakeholders, including provincial and municipal governments,” said John Zeng, a Shanghai-based analyst for research firm LMC Automotive.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
