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GAC President Feng Xingya
 
SHANGHAI AUTO SHOW
GAC partners have no plans to raise stake in JVs, top exec says
Automotive News China | 2019/4/19

Guangzhou Automobile Co.¡¯s partners don¡¯t plan to increase their stakes in Chinese joint ventures, GAC President Feng Xingya told journalists at the Shanghai auto show.

State-owned GAC runs 50-50 partnerships with Toyota Motor Corp., Honda Motor Co., Mitsubishi Motors Corp. and Fiat Chrysler Automobiles.

GAC has held discussions with foreign partners after Beijing pledged last year to ease ownership rules on joint ventures with foreign carmakers producing in China, according to Feng. 

¡°During our communications, our partners have made it very clear that they want to maintain the status quo, with no intent or plans to change the shareholding structure of the joint ventures,¡± he said. 

The company¡¯s foreign partners recognize the valuable role GAC plays in the joint ventures, he added. 

One of the latest contributions GAC has made to partnerships is to arrange for electric vehicles to be built at the joint ventures, earning carbon credits as required under Chinese rules. 

FCA, which mainly assemble SUVs for the Jeep brand at its partnership with GAC, will be the main beneficiary of the arrangement. 

The more valuable a Chinese automaker is to a joint venture, the less likely its foreign partner would seek a majority stake in the partnership, according to Feng.

As a result, any change in ownership mix will vary among the joint ventures that global automakers have established with local companies, he noted. 

In June 2018, the Chinese government agreed to phase out by 2022 the 50-percent cap on foreign passenger vehicle makers¡¯ interest in partnerships with local automakers. 

In October, Brilliance China Automotive agreed to let BMW increase its stake in their joint venture to 75 percent from 50 percent in 2022.

In March, Volkswagen Group Chairman Herbert Diess said the company was evaluating the possibility of raising stakes in China-based joint ventures. 

The Chinese government has dropped a requirement that global EV makers form local joint ventures to sell in the country. As a result, U.S. EV maker Tesla Corp. established a wholly-owned production subsidiary in Shanghai last year. 

Beijing has also agreed to remove by 2020 the 50-percent cap on foreign commercial vehicle manufacturers¡¯ interest in local partnerships.

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