BEIJING — China's landmark decision to loosen restrictions on foreign automotive investment may do little to change the joint venture landscape, international executives said last week at the auto show here.
Foreign manufacturers have invested billions in domestic partnerships and can't easily pull up roots, they say. They must also weigh thorny supply chain and government relations issues.
Local partners also pony up half the massive investment costs, they note. And they help international brands navigate China's bureaucracy and ever-evolving consumer market.
"Whether we go ahead on our own or with new partners really requires in-depth study," Kazuhiro Kobayashi, Toyota's CEO for China, said at the show. "The matter is not that simple. The question is how to best enhance the competitiveness of our vehicles."
Chinese President Xi Jinping promised this month to open investment in the country's auto industry by letting foreign manufacturers own assembly plants outright — rather than pairing in 50-50 joint ventures with a Chinese partner as currently required.
The measures would kick in this year for enterprises making new-energy vehicles, such as full electrics and plug-in hybrids. They would take effect for commercial vehicles in 2020 and open to passenger vehicles in 2022, said Peter Fleet, president of Ford Asia Pacific.
"We welcome the fact that there is some clarity now," Fleet said at the Beijing show.
But despite Beijing's change of stance, Fleet said Ford has no plans to adjust stakes in its two local partnerships, Changan Ford Automobile Co. and Jiangling Motors Corp.
Fleet added that the move is positive because it signals a maturing of the business climate and because it may help streamline government approval of a third venture Ford is pursuing.
In November, Ford and Zotye Auto said they would create a 50-50 partnership, Zotye Ford Automobile Co., to make and sell electric vehicles in China under a new indigenous brand.
That venture is awaiting a government signoff.
"A partner still brings visceral understanding of the marketplace, which I would find hard to match," Fleet added. "There may be some different investments that some people make. But I'd be surprised if there is any violent reaction one way or the other."
Audi and Nissan executives were among those saying the status quo still works.
"We'll maintain the joint venture structure as it is today," Audi CEO Rupert Stadler said of the partnership Volkswagen and Audi have with China FAW Group Corp. "For us, it is very clear. We believe strongly that a good performing joint venture is healthy for qualitative growth."
Nissan likewise has no plans to change its tie-up with Dongfeng Motor Corp. But Jose Munoz, Nissan's chief performance officer and China chairman, said not every automaker may be as satisfied.
"This new regulation is going to show clearly who is happy with their partner and who is not, and offers new opportunities," he said. "For the time being, we, obviously, are very happy."
Yang Jian contributed to this report.