FAW Urges China to Limit Expansion by Foreign Automakers

China should order foreign automakers to contribute more to develop local brands and limit those whose sole aim is to win more sales in the country, according to China FAW Group Corp.

The government should also strictly enforce current rules against foreign automakers having more than two local partners to maintain market order, said Li Weidou, who heads FAW’s export and import business. He made the comments in a speech at the annual meeting of the Chinese People’s Political Consultative Conference, the nation’s top advisory body, in Beijing, according to a transcript provided by the company.

Chinese automakers have been urging the government to take more steps to protect homegrown companies, which are facing intensifying competition from foreign manufacturers expanding in the world’s largest vehicle market. China FAW Group, based in the northeastern city of Changchun, has joint ventures with Volkswagen AG (VOW), Toyota Motor Corp. (7203), Mazda Motor Corp. (7261) and General Motors Co. (GM)

The combined market share for Chinese sedans and compact cars fell to a four-year low of 28.4 percent in 2012, according to China Association of Automobile Manufacturers data.

To contact Bloomberg News staff for this story: Tian Ying in Beijing at ytian@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net