"Revised Car Industry Development Policy" is expected to be announced this year

An informed source close to the National Development and Reform Commission revealed to reporters in Nandu recently that the current focus of the NDRC on the automobile industry is the formulation of an “revised draft of the automobile industry development policy” (hereinafter referred to as “revised draft”). This work started in 2009. Recently, the National Development and Reform Commission is working on it. Accelerating the content improvement work, the draft is expected to be announced this year.

According to reports, the "revised draft" will make more detailed provisions on the hot issues in the automotive industry in recent years, and formulate a specific path for building a strong automobile country from the legal and policy level.

Foreign capital can also be merged and restructured. The current "Automobile Industry Development Policy" is announced in 2004. In recent years, the automobile industry has entered a stage of rapid development. China has won the top spot in global automobile production and sales, and the global automobile market pattern and auto consumption environment have taken place. Obvious changes, some of the original provisions need to be complemented.

China's auto industry has always been characterized by scattered and chaotic features. However, the current "Automobile Industry Development Policy" does not formulate a policy of industrial optimization and joint reorganization. According to reports, the "revised draft" will be issued at the end of 2008 "rejuvenation of the automotive industry. On the basis of the Plan, the detailed rules on mergers and reorganizations not only propose the goal of merger and reorganization of domestic enterprises, but also encourage enterprises to go abroad to acquire foreign related companies according to their own development needs. In addition, foreign-funded enterprises are allowed to enter China to reorganize domestically-poor enterprises.

Analysts said that the financial crisis has drastically reduced the value of foreign auto assets and provided Chinese companies with opportunities for overseas acquisitions. In addition, independent brand companies such as Geely, Chery, and Great Wall have established a solid foundation, and the Revised Draft has increased encouragement for companies to walk away. The regulations on going abroad for mergers and reorganizations and allowing foreign-funded mergers and reorganizations of domestic enterprises mean that the degree of liberalization in the auto market will further increase.

Can the proportion of foreign ownership exceed the 50% bottom line?

Informed sources told Nandu reporters that the “revised draft” will make explicit provisions on the issue of the bottom line in the joint venture vehicle companies that have discussed a lot in recent years. In the domestic vehicle manufacturing joint ventures, there has always been a rule that “the proportion of foreign ownership shall not exceed 50%”. This point was a good protection of China’s rights and interests in the early stage of China’s automobile industry in the early 1990s.

The personage insider analyzed: “The government is under great pressure to break the share ratio issue. Foreign-funded companies often rely on China’s violation of the WTO rules on free trade and hope that the country will liberalize restrictions.”

In recent years, there have been remarks that, as China’s discourse power in joint ventures continues to strengthen, the state should let the joint venture parties decide the proportion of equity based on market conditions.

In an interview with Nandu, auto makers of independent brands stated that after liberalizing the equity ratio, if foreign investors hope to gain further rights and interests, they must use more technology and capital, which is beneficial to the development of the domestic automobile industry in China.

However, the opposing view is that once the country allows foreign capital to break through the current stock-to-peer ratio, the foreign companies of the existing joint venture companies will also increase their ratios by means of capital increase, which will have a greater impact on the domestic auto industry.

Automotive analysts believe that Han Song, the country does not need to open the current restrictions in this regard, China does not lack capital and markets, and the world's major auto manufacturers have joint venture partners in the country, has not yet formed most of the joint venture in China Being a car manufacturer, the country does not need to liberalize the equity ratio limit to attract other companies to invest in China.

New energy development will be introduced separately The increasingly prominent energy crisis has caused new energy vehicles to become the focus of attention around the world. People familiar with the matter said that due to the importance of new energy vehicles in the development of the automotive industry, the Ministry of Industry and Information Technology and the National Development and Reform Commission will independently issue new energy vehicles. The Twelfth Five-Year Plan for Development has already been formulated, but it has not yet been announced.

Informed sources told reporters that "planning" describes how to promote the development of the electric vehicle industry chain including power batteries, motors, and electronic control. As a result of losing the lawsuit in the WTO, China has abolished the "Administrative Measures for the Import of Auto Parts That Constitute Policy Characteristics" and the living environment of the domestic parts and components industry has been affected. Therefore, it is expected that the "planning" will stipulate new batteries and electric motors for new energy vehicles. In joint ventures such as electronic control and other key assemblies and basic materials, the shareholding ratio of Chinese shareholders should not be less than 50%, and for the first time, the share ratio problem in new energy related equipment is clearly defined.