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China: more reasons to be suspicious

There’s an interesting report in the Times of India today, detailing the increasing attentions being paid by three Chinese OEMs – Chery, SAIC and Beiqi Foton – to the Indian auto sector.

It’s the latter that grabs our attention. Foton – or a JV with the same – has been part of the Mercedes Benz game plan for a while now. But it looks like the Chinese are playing a bit coy. Indeed, when we spoke with MB CV boss Hubertus Troska at the IAA last week, we asked a simple question. In the light of his own problems in terms of seeing the deal through with Foton, and with CNHTC’s rejection of Volvo’s overtures, is the landscape shifting?

“It sounds like it,” was his response. “We’re getting signals that maybe Joint Ventures are not the way that Beijing now wants to play anymore; maybe equity participation has more potential.”

We’ve harboured suspicions of the Chinese market for quite some time now. It all sounds very good, but nobody has shown us a return as yet. Now it seems likely that the Chinese OEMs – rich with technology as a result of JVs with Western manufacturers – are getting ready to compete with their own partners in third markets. Given that this is very much a level playing field, we can see a storm or or two on the mid term horizon.

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This page contains a single entry from the blog posted on October 2, 2006 12:49 PM.

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