China scraps foreign ownership limits for car companies

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Foreign car companies will no longer need to set up joint ventures with local companies to manufacture in China.

as early as 2016 and started to ease restrictions in the ensuing years. For example, Tesla was able to establish a fully owned car plant in China in 2018. That same year, BMW was able to take a controlling stake in the joint venture it had with Chinese automaker Brilliance.

With the rule no longer in place, it will be easier for newcomers such as Lucid and Rivian to establish operations in China, which remains the single biggest market both for regular vehicles as well as electric vehicles. Yet, some car companies may continue to maintain ties with local partners. The operation has become so thoroughly ingrained in business practice that some foreign car companies have said they wouldn't be as successful in China without the joint ventures.

 

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