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German Car Parts Suppliers asked to form JVs in China Stuttgarter.
FRANKFURT SHANGHAI Reuters - Three German auto parts suppliers were told by China, they can no longer manage their Chinese units independently, but they must form partnerships with local peers, the general manager for auto parts manufacturer Elringklinger told a newspaper German.
The Chinese government has said several German automotive suppliers that they are allowed to exploit their Chinese subsidiaries on their own but only as part of a joint venture in the future, Stefan Wolf was quoted as saying by the Stuttgarter Zeitung He said he knew three companies that now needed to find a Chinese partner, but did not say that, adding Elringklinger was unaffected should this happen, it would be an interference with property intellectual 50 percent of the company is taken away - this indeed is the expropriation, Wolf said that I think it's an attempt to make room for maneuver in terms of expertise and innovation.
Unit German auto parts maker Robert Bosch GmbH of China said it has received no notification from the Chinese authorities on foreign investment policy changes related to the automotive components industry.
We believe that foreign investment will continue to play a vital role in the economic development of China and anticipate improving the investment environment of fair and free competition in China, Bosch said in a statement sent by e-mail.
Continental another major German automotive supplier, could not be immediately reached for comment headquarters of China units US engine manufacturer Cummins Inc. And Faurecia SA of France said they are not aware of any policy change .
Chinese investment bank China International Capital Corp. Said in a report Monday that the Chinese government, which has the power to approve foreign investment is more likely to push manufacturers of foreign components to voluntarily seek a Chinese partnership in the process approval, rather than short-term drastic policy changes.
Currently, foreign manufacturers must form joint ventures in China to manufacture cars locally, but foreign components manufacturers are not subjected to any ownership requirement.
Earlier this month, the European Union Chamber of Commerce in China expressed concern over a recent series of antitrust investigations, saying that China, the world's biggest auto market, was using strong-arm tactics and seemed unfairly target foreign companies at the time, the room said he had received many alarming anecdotal evidence from a number of sectors that administrative intimidation tactics are used to encourage companies to accept sanctions and remedies without hearings complete the automotive sector has been under supervision of the national development of China and the NDRC reform, which investigated the car companies amid accusations by state media that global automakers are overcharging consumers.
The Chinese state is noteworthy that 50 percent of the automotive world is taking place in China and its manufacturers do not benefit accordingly Elringklinger sWolf told the newspaper.
European brands of cars, including Audi Volkswagen AG, BMW and Mercedes-Benz are scrambling to lower prices for cars and spare parts in an effort to appease Chinese regulators have accused some of them of anti-competitive behavior .
The US and European manufacturers are eager to expand their presence in China, now the world's largest car market, but were limited to owning 50 percent or less of joint venture companies with companies managed jointly owned by the Chinese state.
Statement by Christoph Steitz, Edward Taylor, Andreas Cremer in FRANKFURT and Samuel Shen in SHANGHAI; Editing by David Evans and Kenneth Maxwell.
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