China’s auto industry should independently develop technologies

Source:Global Times Published: 2017/5/10 21:38:38

China's domestically built large passenger jet C919 made its maiden flight on May 5, sparking a wave of national pride over the country's advanced engineering capabilities and its ability to challenge giants like Boeing and Airbus.

However, its debut gave rise to suspicions that only the jet's shell had been developed in China, while core components were produced overseas.

The domestic auto industry has also unexpectedly found itself involved in the dispute after being cited as a negative example.

Industry experts argue that the localization rate of components for the C919 is around 50 percent, a figure that most managers of domestic auto enterprises would struggle to achieve, even for new joint ventures.

Many automobiles in China, such as Magotan cars of FAW-Volkswagen Automotive Co and Lacrosse cars of SAIC General Motors Co, are only assembled by Chinese companies while their foreign partners control core technologies.

By contrast, Commercial Aircraft Corp of China (COMAC) is a purely domestic company. COMAC independently designs its passenger jets and has foreign enterprises supply some components, a universal business model for jet makers including Boeing and Airbus.

But for almost all domestic JV automakers, such as Dongfeng Nissan ­Passenger Vehicle Co, GAC Toyota Motor Co and Changan Ford Automobile Co, the core technologies are in the hands of their foreign partners.

If these automakers had competed with their foreign counterparts by bringing their own advantages into full play, and not helped foreign brands' expansion into the Chinese auto market in exchange for their technologies, they would not have found themselves in such an embarrassing situation.

Why do these automakers make no effort to develop their own brands? They have finally realized that they have not gained any technologies from their foreign counterparts while also giving up their home market.

Posted in: COMPANIES

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