Page 168 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
so investors shouldn’t expect another round to and innovation of producing electric vehicles.
have the intended effect (Takashi). Beijing has been keeping a tight grip on foreign
ownership in the car industry to protect local
players, albeit with growing calls from business
All is not lost for foreign brands in China. groups to loosen the requirements. Locally
Indeed, US automakers saw great opportunities produced cars under foreign brands dominate
in Chinese market as the trade issue between China’s car market. The mainland imported
China and the United States appears to be 17,000 Tesla vehicles in 2017, a jump of 51.6
moving into a new, calmer phase. percent from a year earlier (Lee and Ren).
CEO for Fiat Chrysler Automobiles (FCA) Mike However, China’s new energy vehicle startups
Manley was happy to hear a change in tone in are facing decelerated sales growth. Data
the negotiations between China and the United released by the China Passenger Car Association
States. “Obviously I’m pleased they’re going to shows that Xpeng Motors, WM Motor and
enter a period where the discussions are going to Nio—the leading new energy carmakers in the
start up again and we’ll see what happens there,” country—did not seen their sales volume exceed
he said. “China for us is a relatively small part of 10,000 in the first six months of 2019. By then,
our business so it really represents a significant Xpeng Motors sold 9,596 units; WM Motor sold
opportunity. What we’re working on is how to 8,747 units; and Nio sold 7,481 units. It means
unlock that opportunity for us. So, we saw a that it was tough for the startups to meet their
drop in the Chinese market for the first time in annual sales targets. The China Association of
30 years, something like that, [in 2018].” Manley Automobile Manufacturers cut its year-round
expected growth in 2019. Herbert Diess, CEO for sales estimate of the new energy vehicle market
Volkswagen AG, echoed the sentiments of other to 1.5 million from the previous 1.6 million in late
executives. He believes that improved relations July 2019. Behind the sales figures are handicaps
between the world’s two largest economies will the new energy carmakers suffer. Largescale
benefit not only both countries, but the global capital investment is one of the pivotal challenges
economy (Xinhua, US Automakers). China is still to new energy carmakers. It is worth noting
an export hub for Volvo Cars. Hakan Samuelsson, that from the second half of 2018, there were
the company’s president and chief executive, fewer new energy car startups being financed.
said, “Currently, the majority of cars sold in China As of June 2019, venture capital investment
were built in China, it’s a very good degree of in China’s electric vehicle sector has totaled
localization, but China is also used as Volvo Cars’ US$783 million. This was down by 86.95 percent
export hub. Due to US imposed tariffs, we had to from US$6 billion in the same period in 2018. In
redistribute.” To avoid cost hikes due to tariffs, addition, fire incidents and consumer complaints
“cars produced in China now do not export to the were issues that demanded automakers’ prompt
US, but still export to third countries not affected solutions. With the application of the country’s
by the tariffs,” he said (Xinhua, Volvo). stricter State VI emission standards, the withdraw
of the government’s subsidies by the end of
New Energy Vehicles 2020, as well as competition from international
carmakers’ getting into the segment, Chinese
China is now the world’s biggest electric new energy automakers are facing pressure to
vehicles (EV) market, outselling both the US and survive (Zhang, China OKs).
Europe. According to data from auto intelligence
firm Jato Dyamics, China sold a total of 227,000 Sales of new energy vehicles in China fell for
electric vehicles covering January to September the first time in 30 months, sliding 4.7 percent in
in 2017, with a growth rate of 126 percent. Fully July 2019 from a year earlier, but the country’s
electric vehicles will earn more credits than plug- leading auto industry association expected
in hybrids under the China Carbon Credit Program the segment to ring up overall growth for the
which will come into effect in 2019. Chinese calendar year. Carmakers in China delivered
manufacturers have prioritized the development 80,000 electric cars, plug-in hybrids and fuel cell
168
so investors shouldn’t expect another round to and innovation of producing electric vehicles.
have the intended effect (Takashi). Beijing has been keeping a tight grip on foreign
ownership in the car industry to protect local
players, albeit with growing calls from business
All is not lost for foreign brands in China. groups to loosen the requirements. Locally
Indeed, US automakers saw great opportunities produced cars under foreign brands dominate
in Chinese market as the trade issue between China’s car market. The mainland imported
China and the United States appears to be 17,000 Tesla vehicles in 2017, a jump of 51.6
moving into a new, calmer phase. percent from a year earlier (Lee and Ren).
CEO for Fiat Chrysler Automobiles (FCA) Mike However, China’s new energy vehicle startups
Manley was happy to hear a change in tone in are facing decelerated sales growth. Data
the negotiations between China and the United released by the China Passenger Car Association
States. “Obviously I’m pleased they’re going to shows that Xpeng Motors, WM Motor and
enter a period where the discussions are going to Nio—the leading new energy carmakers in the
start up again and we’ll see what happens there,” country—did not seen their sales volume exceed
he said. “China for us is a relatively small part of 10,000 in the first six months of 2019. By then,
our business so it really represents a significant Xpeng Motors sold 9,596 units; WM Motor sold
opportunity. What we’re working on is how to 8,747 units; and Nio sold 7,481 units. It means
unlock that opportunity for us. So, we saw a that it was tough for the startups to meet their
drop in the Chinese market for the first time in annual sales targets. The China Association of
30 years, something like that, [in 2018].” Manley Automobile Manufacturers cut its year-round
expected growth in 2019. Herbert Diess, CEO for sales estimate of the new energy vehicle market
Volkswagen AG, echoed the sentiments of other to 1.5 million from the previous 1.6 million in late
executives. He believes that improved relations July 2019. Behind the sales figures are handicaps
between the world’s two largest economies will the new energy carmakers suffer. Largescale
benefit not only both countries, but the global capital investment is one of the pivotal challenges
economy (Xinhua, US Automakers). China is still to new energy carmakers. It is worth noting
an export hub for Volvo Cars. Hakan Samuelsson, that from the second half of 2018, there were
the company’s president and chief executive, fewer new energy car startups being financed.
said, “Currently, the majority of cars sold in China As of June 2019, venture capital investment
were built in China, it’s a very good degree of in China’s electric vehicle sector has totaled
localization, but China is also used as Volvo Cars’ US$783 million. This was down by 86.95 percent
export hub. Due to US imposed tariffs, we had to from US$6 billion in the same period in 2018. In
redistribute.” To avoid cost hikes due to tariffs, addition, fire incidents and consumer complaints
“cars produced in China now do not export to the were issues that demanded automakers’ prompt
US, but still export to third countries not affected solutions. With the application of the country’s
by the tariffs,” he said (Xinhua, Volvo). stricter State VI emission standards, the withdraw
of the government’s subsidies by the end of
New Energy Vehicles 2020, as well as competition from international
carmakers’ getting into the segment, Chinese
China is now the world’s biggest electric new energy automakers are facing pressure to
vehicles (EV) market, outselling both the US and survive (Zhang, China OKs).
Europe. According to data from auto intelligence
firm Jato Dyamics, China sold a total of 227,000 Sales of new energy vehicles in China fell for
electric vehicles covering January to September the first time in 30 months, sliding 4.7 percent in
in 2017, with a growth rate of 126 percent. Fully July 2019 from a year earlier, but the country’s
electric vehicles will earn more credits than plug- leading auto industry association expected
in hybrids under the China Carbon Credit Program the segment to ring up overall growth for the
which will come into effect in 2019. Chinese calendar year. Carmakers in China delivered
manufacturers have prioritized the development 80,000 electric cars, plug-in hybrids and fuel cell
168
