Page 164 - 2018 White Paper on the Business Environment in China
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8 White Paper on the Business Environment in China
car owners replacing old cars with new ones have also similar deals the year before (Li, Geely). Tencent Holdings
spurred market growth (Automobile Manufacturing). forked over $1.78 billion for a 5 percent share of Tesla. A
China’s vehicle sales increased by 13.7 percent in 2016— month later, the Silicon Valley automaker announced
the fastest pace in three years—but the China Association plans to define its production plans for China by the end
of Automobile Manufactures predicts the increase in sales of 2017 (Higgins and Moss). Ningbo Joyson Electric Corp
is expected to top out at only 5 percent growth in 2017 to announced a $1.59 billion takeover of the Japanese airbag
29.4 million vehicles as the tax cut on small engine cars is maker Takata, the fifth such purchase in two years if they
reduced. The sale tax on cars with engines of 1.6 liters or can finalize the deal. The takeover of scandal-stricken
smaller was cut to 5 percent from 10 percent in late 2015. airbag maker Takata is viewed across the industry not
That tax rate went up to 7.5 in 2017 before returning to only as a step toward upgrading production, but also a
10 percent in 2018. The initial plan to expire the tax break bid to break into the Japanese-dominated airbag sector
outright on the last day of 2016 led many customers to (Yan). China’s total investment into the overseas industry
rush out to buy cars that year (Spring and Cheng). has reached over $34 billion since 2008 (Song, Chinese
companies). Furthermore, China’s Geely Holding set up
Sales of electric and plug-in hybrid vehicles, which a joint venture with Volvo Cars to share existing and
rose 53 percent to 507,000 units in 2016, could also ease future care technology. The 50:50 partnership will enable
as well in 2017 as subsidies for passenger car sales in the Volvo Cars, Geely Auto and Lynk & Co—all controlled
segment are cut by a fifth (Spring and Cheng), but the by Geely Holding—to share technologies via licenses
time is not quite right to bet on that table. The home agreements. Volvo’s Vice President and Chief Executive
of Tesla, Chevy’s Volt and Bolt, and a major market for Hakan Samuelsson said, “This planned collaboration will
Nissan’s Leaf, the United States has been a frontrunner strengthen Volvo’s ability to develop next generation
in electric vehicles. U.S. regulations demanded that electrified cars.” The strategy also entails future plans to
automakers produce zero-emission vehicles alongside cover vehicle components such as battery cells, e-motors
their profit generating gas-guzzlers such as SUVs and and charging systems (Li, Geely). In another merger,
pickup trucks. The Trump administration wants to shred Zhejiang Geely’s 100 percent acquisition of Terrafugia, a
those environmentally focused rules. The auto industry flying-car startup based in the United States, is a bet on the
is already swinging its attention to the east. Volkswagen profitable future of the currently fictional business (Yan).
Brand Chief Herbert Diess told Reuters, “We are convinced
China will become the leading market for electro mobility.” Electric and Low Energy Vehicles
Chinese credits and rebates have driven up impressive EV
sales. The government is even considering mandating that China now leads the world in new energy vehicle
electric and hybrid cars must make up 12 percent of each development according to a 2017 second quarter survey
manufacturer’s sales by 2020 (Stewart). by the E-Mobility Index. China’s sales of electronic cars
have risen from 5,000 in 2011 to over 510,000 in 2016.
According to Wired Magazine, while U.S. policies The China Association of Automobile Manufacturers
push EVs to battle climate change and reduce American believes this total could break 800,000 units by the end
dependence on foreign fuels, the Chinese see the of 2017, accounting for more than half of the global
technology not just as a way to reduce urban smog, levels. The Guideline on China’s Medium and Long-term
but also as a route to prominence. Christopher Marquis, Car Industry Development, jointly published by the
rofessor in sustainable global enterprise at Cornell, National Development and Reform Commission and
says China sees leadership in the auto industry as a the Ministry of Science and Technology in 2017, claimed
way to raise the country’s profile and its government is that new energy cars were expected to be a key area in
prepared to invest in the effort. “The automobile sector building China from a “big” auto power to a “strong” one.
is something that gives a lot of prestige to countries,” International cooperation is also gearing up. German
Marquis added (Stewart). car giant Daimler signed a framework agreement with
China’s BAIC Group to produce electric cars for Mercedes-
For China, it may be a case of “if you can’t beat’em… Benz. Both companies are planning to produce electric
join’em”. Chinese companies accelerated their takeover cars in China by 2020 and to provide the necessary
efforts of the overseas auto industry in the first half of infrastructure for battery localization using Chinese cells.
2017. By July, Chinese companies made eight overseas Volkswagen plans to offer Chinese consumers 400,000
deals totaling more than $5.5 billion. They made nine new energy vehicles (NEVs) by 2020 and over 1.5 million
164
car owners replacing old cars with new ones have also similar deals the year before (Li, Geely). Tencent Holdings
spurred market growth (Automobile Manufacturing). forked over $1.78 billion for a 5 percent share of Tesla. A
China’s vehicle sales increased by 13.7 percent in 2016— month later, the Silicon Valley automaker announced
the fastest pace in three years—but the China Association plans to define its production plans for China by the end
of Automobile Manufactures predicts the increase in sales of 2017 (Higgins and Moss). Ningbo Joyson Electric Corp
is expected to top out at only 5 percent growth in 2017 to announced a $1.59 billion takeover of the Japanese airbag
29.4 million vehicles as the tax cut on small engine cars is maker Takata, the fifth such purchase in two years if they
reduced. The sale tax on cars with engines of 1.6 liters or can finalize the deal. The takeover of scandal-stricken
smaller was cut to 5 percent from 10 percent in late 2015. airbag maker Takata is viewed across the industry not
That tax rate went up to 7.5 in 2017 before returning to only as a step toward upgrading production, but also a
10 percent in 2018. The initial plan to expire the tax break bid to break into the Japanese-dominated airbag sector
outright on the last day of 2016 led many customers to (Yan). China’s total investment into the overseas industry
rush out to buy cars that year (Spring and Cheng). has reached over $34 billion since 2008 (Song, Chinese
companies). Furthermore, China’s Geely Holding set up
Sales of electric and plug-in hybrid vehicles, which a joint venture with Volvo Cars to share existing and
rose 53 percent to 507,000 units in 2016, could also ease future care technology. The 50:50 partnership will enable
as well in 2017 as subsidies for passenger car sales in the Volvo Cars, Geely Auto and Lynk & Co—all controlled
segment are cut by a fifth (Spring and Cheng), but the by Geely Holding—to share technologies via licenses
time is not quite right to bet on that table. The home agreements. Volvo’s Vice President and Chief Executive
of Tesla, Chevy’s Volt and Bolt, and a major market for Hakan Samuelsson said, “This planned collaboration will
Nissan’s Leaf, the United States has been a frontrunner strengthen Volvo’s ability to develop next generation
in electric vehicles. U.S. regulations demanded that electrified cars.” The strategy also entails future plans to
automakers produce zero-emission vehicles alongside cover vehicle components such as battery cells, e-motors
their profit generating gas-guzzlers such as SUVs and and charging systems (Li, Geely). In another merger,
pickup trucks. The Trump administration wants to shred Zhejiang Geely’s 100 percent acquisition of Terrafugia, a
those environmentally focused rules. The auto industry flying-car startup based in the United States, is a bet on the
is already swinging its attention to the east. Volkswagen profitable future of the currently fictional business (Yan).
Brand Chief Herbert Diess told Reuters, “We are convinced
China will become the leading market for electro mobility.” Electric and Low Energy Vehicles
Chinese credits and rebates have driven up impressive EV
sales. The government is even considering mandating that China now leads the world in new energy vehicle
electric and hybrid cars must make up 12 percent of each development according to a 2017 second quarter survey
manufacturer’s sales by 2020 (Stewart). by the E-Mobility Index. China’s sales of electronic cars
have risen from 5,000 in 2011 to over 510,000 in 2016.
According to Wired Magazine, while U.S. policies The China Association of Automobile Manufacturers
push EVs to battle climate change and reduce American believes this total could break 800,000 units by the end
dependence on foreign fuels, the Chinese see the of 2017, accounting for more than half of the global
technology not just as a way to reduce urban smog, levels. The Guideline on China’s Medium and Long-term
but also as a route to prominence. Christopher Marquis, Car Industry Development, jointly published by the
rofessor in sustainable global enterprise at Cornell, National Development and Reform Commission and
says China sees leadership in the auto industry as a the Ministry of Science and Technology in 2017, claimed
way to raise the country’s profile and its government is that new energy cars were expected to be a key area in
prepared to invest in the effort. “The automobile sector building China from a “big” auto power to a “strong” one.
is something that gives a lot of prestige to countries,” International cooperation is also gearing up. German
Marquis added (Stewart). car giant Daimler signed a framework agreement with
China’s BAIC Group to produce electric cars for Mercedes-
For China, it may be a case of “if you can’t beat’em… Benz. Both companies are planning to produce electric
join’em”. Chinese companies accelerated their takeover cars in China by 2020 and to provide the necessary
efforts of the overseas auto industry in the first half of infrastructure for battery localization using Chinese cells.
2017. By July, Chinese companies made eight overseas Volkswagen plans to offer Chinese consumers 400,000
deals totaling more than $5.5 billion. They made nine new energy vehicles (NEVs) by 2020 and over 1.5 million
164
