Content provided in partnership with

Automotive Industry

China's automakers look to alliances for survival - International Trends - Brief Article

Automotive Industries, July, 2002 by Andrea Wielgat

Chinese automakers are beginning to consolidate to compete more effectively with foreign OEMs entering the market following China's membership in the World Trade Organization (WTO).

Late last month First Automotive Works (FAW) -- China's largest automaker -- said it would buy 50.98 percent of Tianjin Xiali, a subsidiary of Tianjin Automotive, while Shanghai Automotive Industry Corp. (SAIC) and Yuejin Motors are reportedly negotiating an alliance and Dongfeng Motors is said to be in talks with Beijing Auto.

The FAW-Tianjin deal is the first in what analysts say will be a long stretch of mergers and joint ventures expected during the next several years. These alliances will help local automakers remain competitive as foreign automakers enter the market with low-cost, high-technology vehicles.

Most Popular Articles in Autos: Service Slants; 2007 utility vehicle buyer's guide: Side-By-Sides are popular; here's who ...; Transmission considerations: beyond the manual gearbox; Buell Motorcycle engineering, innovation, & dedication: in an industry ...; 100 + 10: America's oldest automotive magazine celebrates its 110th year ...; More »

Holding up China's automakers are joint ventures the companies made with foreign automakers in recent years. The JVs mean subsidiaries within the automakers may end up directly competing with each other.

While numerous foreign automakers are already operating in China more are expected to make investments in the country's auto industry as tariffs on imports continue to drop. China's entry into the WTO last year cut import tariffs to 40-50 percent with another drop to 25 percent expected by 2006.

Both foreign and local automakers are hoping to cash in on the jump in car sales expected in the near future. New vehicle sales are expected to increase from 2.36 million last year to 3 million this year as the country's 1.3 billion people continue to see economic growth. Experts say some 200,000 foreign vehicles will be sold this year compared to 72,000 last year.

RELATED ARTICLE: Joint ventures and alliances in China

First Automotive Works

* Plans to buy 50.98 percent of Tianjin Xiali

* JV with Volkswagen

Dongfeng Motors Co.

* JV with PSA Peugeot Citroen

* JV with Kia Motors

* JV with Nissan

Shanghai Automotive Industry Corp.

* JV with VW

* JV with GM

* JV with GM and Wuling Automotive

Tianjin Automotive Industry Corp.

* JV with FAW

* JV with Toyota

China Brilliance Group

* JV with BMW

Beijing Automotive Industry Co.

* Partially owned by DaimlerChrysler

* JV with Hyundai

* Planned venture with Mitsubishi

China National Heavy Truck Corp.

* Planned JV with Volvo Truck

Chongqing Changan Group Corp.

* JV with Suzuki

* JV with Ford

Yuejin Automotive Group

* JV with Fiat

Automotive Industry

China's automakers look to alliances for survival - International Trends - Brief Article

Automotive Industries, July, 2002 by Andrea Wielgat

Find Research Guides for:

Find Featured Titles for: Arts

Most Popular Articles in Autos

Most Popular Publications in Autos