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Chinese Carmakers Under Pressure as Joint-Venture Caps Erased

  • China announced removal of 50% cap on foreign ownership of JVs
  • Move is ‘good stimulus’ to strengthen Chinese brands: analyst
Bloomberg business news
Bloomberg’s Kevin Buckland reports on China’s elimination of foreign ownership limits for passenger-vehicle ventures.(Source: Bloomberg)
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The days of free lunch for Chinese carmakers are numbered.

The country lifting the 50 percent cap on the stakes that foreign automakers can own of local joint ventures sends a message to the Chinese partners: take charge of your own future. That means manufacturers like SAIC Motor Corp., China’s largest by sales, Guangzhou Automobile Group Co. and BAIC Motor Corp. can no longer bank on the strong German, U.S. or Japanese partner brands to keep buoying sales indefinitely.