Lexus production
The Toyota luxury brand would benefit particularly strongly from the market opening.
Automakers like BMW. Daimler and Toyota are likely to over the Message from the Chinese President Xi Jinping pleased: This announced in his speech on Tuesday to lower import tariffs on cars later this year. In doing so, the head of state is addressing the companies’ demands, which have been voiced for years, to facilitate access to the Chinese billion-dollar market.
China will cut tariffs significantly and sincerely hope to boost imports, Xi said Forum Boao in the Chinese city of Hainan. He also reaffirmed the Chinese government’s intention to set limits on foreign ownership Automotive joint ventures to relax.
This should be done as soon as possible, said Xi, without, however, to give more details about the project. Currently, foreign companies can participate in Chinese joint ventures with a maximum of 50 percent.
New era: China’s president Xi promises lower tariffs and greater openness
If the import tariffs are actually lowered, it is likely that those car manufacturers who have not yet relocated their production facility to China will benefit above all. These are mainly luxury car manufacturers, like the ToyotaDaughter Lexus. On the other hand, both the VW-Daughter Audi as well as the luxury brand of General Motors. Cadillac, own factories in China. They should not benefit as much from the tariff reductions.
The Germans in particular have represented their joint ventures in China for decades. Volkswagen has been cooperating with the Shanghai Automotive Industry Corporation (SAIC) since 1988 and with First Automotive Works (FAW) since 1991 to build components and models for the world’s largest auto market. In electric cars and light commercial vehicles, the Wolfsburg work together with Anhui Jianghuai Automobile (JAC).
Daimler has with BYD and BAIC not only two Chinese joint venture partners, but with GeelyOwner Li Shufu also a Chinese major shareholder. The S-Class for the Chinese market But the Swabians are still building in Sindelfingen. They too should therefore benefit from falling import duties.
The impetus of the Chinese government to open the markets comes just at a time when protectionism is spreading. For example, US President Donald Trump announced last week that he would impose further punitive tariffs on Chinese imported products. China, for its part, proposed last week to tax US cars with an additional 25 percent. Currently, import duties on cars of all foreign manufacturers amount to 25 percent.
The threat now seems to be a thing of the past. He interpreted the signs of the Chinese government as “encouraging,” said chief of the Asian division of the US manufacturer, Peter Fleet, the news agency Bloomberg.
The stock market also reacts positively to Xi’s message. The shares of the German automotive companies were already significantly ahead of the stock market. BWM, Daimler and VW temporarily noted more than two percent plus. The shares of Toyota and Nissan each increased by up to two percent, Mazda papers rose a good one percent higher.
On the other hand, it was for the shares of Chinese automakers, such as BAIC, BYD and Guangzhou Automobile downhill – after all, they are getting more competition from the new regulation.
Bloomberg
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