China's Plans for Its Own Car Brands Stall

Mainland automakers are big producers—for foreign partners
Market share in China of foreign and joint-venture auto brands: 63 percent Illustration by Victor Kerklow

Liu Yu thought he was making a pretty generous offer: a $1 million subsidy to entrepreneurs willing to build a dealership for BAIC Motor’s Beijing car brand. Although that covers three-fourths of the cost of each outlet, the BAIC deputy sales chief has struggled to recruit the 150 dealer candidates he wants by yearend. In contrast, BAIC’s state-run parent company has no trouble finding dealers for its joint ventures with Mercedes-Benz maker Daimler and Hyundai Motor—even without subsidies. “China’s indigenous cars are the lowest in the food chain,” says Liu. “Many consumers are biased against them.”

To continue reading this article you must be a Bloomberg Professional Service Subscriber.