China is world’s largest car market and manufactures are introducing Chinese specific models to increase their footprint in the country. Finally the Chinese government has decided to remove foreign ownership limitation for car makers.
The government announced in 1994 that foreign manufacturers couldn’t own more than 50% of share in their joint ventures. Even though this has resulted in some interesting partnerships and most of them have worked well for foreign automakers to make their market in the country.
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The new decision will also increase pressure for domestic manufacturer as the competition is going to heat up even more. The new law will help Chinese government to increase investments to the country. The pollution is also increasing in China at an alarming rate so the government is giving more importance for electric and hybrid vehicles.
Also Read: Hyundai Encino (Kona SUV) Enters China; India Launch Likely Next Year
The trade relationship between China and US are not at their best and Ford is worried about this but they welcome the new decision of Chinese government to remove ownership limits. Chinese government is also planning to lower import taxes. This will certainly help premium car manufacturer as with current taxes, they are priced high and it will make these models more accessible.
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