As a result of the Chinese government’s investment regulations, foreign automotive companies have had to invest in China through joint ventures with local partners. Chinese firms have gained access to the technology and know-how of their foreign partners and have profited financially as many of the joint ventures call for an equal split of all profits generated in China. As their confidence and capabilities grow, and as the domestic Chinese market starts to slow down, a number of China’s auto firms are taking serious steps to expand their presence internationally.

Shanghai Automotive Industry Corp (SAIC), for example, is the Chinese JV partner for both Volkswagen and General Motors. Armed with fresh ideas and cash, SAIC has embarked on an overseas expansion programme, acquiring a controlling stake in South Korea’s fourth-largest automaker, Ssanyong, and pursuing talks to take a majority stake in the UK’s Rover, although these subsequently failed. SAIC is preparing a public listing to finance its goal of becoming one of the world’s six largest automakers by 2020. Chinese companies are also trying to make cars that are attractive to European consumers. Chery Automobile has outsourced design to a number of European companies.

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Like the Japanese and Korean firms before them, some of China’s automakers are aiming to become international players. They certainly have the ambition and resources to achieve their goal.

Andreas Dressler is a director of KPMG’s Global Location & Expansion Services.

E-mail: ADressler@kpmg.com

As a result of the Chinese government’s investment regulations, foreign automotive companies have had to invest in China through joint ventures with local partners. Chinese firms have gained access to the technology and know-how of their foreign partners and have profited financially as many of the joint ventures call for an equal split of all profits generated in China. As their confidence and capabilities grow, and as the domestic Chinese market starts to slow down, a number of China’s auto firms are taking serious steps to expand their presence internationally.

Shanghai Automotive Industry Corp (SAIC), for example, is the Chinese JV partner for both Volkswagen and General Motors. Armed with fresh ideas and cash, SAIC has embarked on an overseas expansion programme, acquiring a controlling stake in South Korea’s fourth-largest automaker, Ssanyong, and pursuing talks to take a majority stake in the UK’s Rover, although these subsequently failed. SAIC is preparing a public listing to finance its goal of becoming one of the world’s six largest automakers by 2020. Chinese companies are also trying to make cars that are attractive to European consumers. Chery Automobile has outsourced design to a number of European companies.

Like the Japanese and Korean firms before them, some of China’s automakers are aiming to become international players. They certainly have the ambition and resources to achieve their goal.

Andreas Dressler is a director of KPMG’s Global Location & Expansion Services.

E-mail: ADressler@kpmg.com