That hurts: Chinese government punishes Audi and Chrysler for price fixing. More fines to come

Winterkorn in Beijing - Picture courtesy Bertel Schmitt

Foreign brands own more than 70 percent of the world’s largest car market China, and they are taking home outsized profits. China’s government is putting an end to this. China’s antitrust regulator, the National Development and Reform Commission (NDRC), found Audi and Chrysler guilty of monopoly practices. “They will be punished accordingly in the near future,” NDRC spokesman Li Pumin told Reuters. The still unannounced fines can be up to 10 percent of the automaker’s domestic annual sales revenue. [Continue Reading]

Nissan lays out plans for a recapture of Chinese market share, thinks government EV plans are too optimistic

Jun Seki - Picture courtesy Bertel Schmitt

Japanese-branded cars led the market a few years ago. First they were dethroned by the Germans, then they went into a dangerous spiral as collateral damage from the island troubles. Last year, the Nipponese slowly clawed back their sales. After keeping a low profile for a while, Japanese automakers announced aggressive plans to retake lost market share. Today, Nissan’s head of its operations in China, President of Dongfeng Motor Co., Ltd. Jun Seki came to Yokohama to explain his plans to the Japanese media and the Daily Kanban.

With 1,266 million units sold in the last fiscal, China is the second largest country market in Nissan’s universe, ranging only 19,000 units behind the U.S. This year, China is poised to become Nissan’s largest market with projected sales in the vicinity of 1.43 million units.

Nissan was one of the last major automakers to enter the Chinese market. The company came to China in 2003 with the Sunny. Together with its joint venture partner, government-controlled Dongfeng, Nissan focused on smaller car segments that at the time had been mostly ignored by other makers. Its Tiida sedan and hatchback, introduced in 2005, was a big hit with Japanese customers just as the Chinese market started to pick up steam, and Nissan quickly became the leading Japanese automaker in China. [Continue Reading]

Why BMW won’t buy more of Brilliance – at least not now

10 years - Picture courtesy China Daily

10 more years?

BMW is investing heavily into a raft of new models to dust rival Audi, but it won’t buy more shares in its Chinese joint venture partner Brilliance. This week in Munich, BMW’s CFO Friedrich Eichiner blew off a Bloomberg reporter who asked whether BMW would. “The market is regulated,” Eichinger snapped. “This question is not relevant, it is legally not possible.” Indeed, it is not. If you want to build cars in China, you need a Chinese joint venture partner who must own no less than 50 percent of the shares.

This system was put in place decades ago when China opened its doors to foreign automakers. The idea was that Chinese would learn on the job everything about developing, manufacturing, and selling cars. Once China was developed into an auto giant, one could dispose of the cumbersome laowei.

It just did not work out that way. [Continue Reading]