Multinational corporations busy importing

The whole world see the high profits and rapid growth of Chinese passenger car market. Multinational auto corporations achieve maximize paybacks on their huge investments in the Chinese market. To strengthen importing or consolidate self-control parts and components system is one of the best practices for these multinational corporations.

As in 2008 the U.S. financial crisis led the worldwide automotive industry into a temporary slump, Chinese auto market also suffered a negative growth. At that time the depression occurred to the imported auto part and components industry too. Then in the year of 2009, Chinese passenger car market became the largest market in the world as well as one of the markets developing fastest. The competition between the multinational auto enterprises was getting more intense. Especially after the WTO claimed the characteristics of Chinese vehicle had violated WTO rules, the multinational corporations increasingly expanded the importation of auto parts and components since the Chinese import policy adjusted

In November of 2009, the sales of CKD reached 2.6 million units, up to 140% from a year earlier while the sales growth of domestic vehicles was only 87%.Although the total amount of imported cars is not large, the market shares of their sales were much higher than that of their sales volume.

　　1. A higher status of automotive industry

Although the automobile industry has been considered as declining industry, it is now referred to as significant industry because of new energy vehicles emerging recently. As a result, the status of automobile industry gets higher in developed countries. Obama Administration’s new energy policy is a typical example to demonstrate the enhancement of the status of automobile industry.

To further enhance the status of the industry and obtain higher interests, developed countries try hard to upgrade the existing industry in the aspects of greenhouse gases and carbon emissions. As the status is getting improved, the auto parts and components are gaining new development as well as boosting employment. The reason main for transnational groups and Western governments are most likely to form a co-operation relationship is to alleviate the employment pressure in developed countries.

　　2. Forbid the technologies overflow

Our domestic-funded enterprises are very skillful at learning and imitation, which always terrify multinational corporations most. China has become the world’s factory. Nowadays, many of its products account for a market share of are more than 50% in the world. Multinational corporations are so relieved to put large mounts of products into China because the independent innovation ability of some Chinese industry is not strong enough. However, our passenger car industry has formed a very strong capability of independent innovation. As a traditional mechanical part, the core technologies of auto parts and components can be easily imitated by domestic-funded enterprises.

　　3. Control the profit sources

As the prices of our domestic high-class passenger cars are relatively higher, the imported parts need not worry about the high costs. Firstly get a part of profits independently and then pocket half of the vehicle manufacturing profits, the total profit can be higher. Let alone in some case, it is not a bad thing if the joint ventures get a loss, at leas the right of speech of foreign partial can be strengthened.（translator：Yalong/Jessie）

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