China-based German Auto Part Suppliers Required to Establish Joint-venture with Chinese Companies

According to ElringKlinger, a German auto part supplier, several German auto part suppliers have been notified by Chinese authorities that they must establish joint-venture with other Chinese companies if they would like to continue their operation in China. These German suppliers consider this requirement to be plagiarism of their intelligent properties. “If we really do so, half the assets of the whole company will be taken away, or actually be confiscated,” Stefan Wolf, CEO of ElringKlinger, told the media. He added that the Chinese government noticed 50% of the global automotive trade was in China, but the domestic Chinese companies did not get the benefit in return as the government claimed.”

Recently China has initiated the antidumping investigation against automotive industries. According to the European Union Chamber of Commerce in China, non-Chinese companies seemed to be unfairly biased in the investigation. The current dilemma for automotive industries in China is that, automotive suppliers from EU and USA are eager to increase their market share in China, but on the other hand, the Chinese government does not allow all non-Chinese automotive suppliers to gain over 50% of the total company shares under joint-venture. It is understood that 3 German auto part suppliers have been searching for their Chinese partners. Two largest auto part suppliers headquartered in Germany, Robert Bosch and Continental AG, still do not make any comment on this matter.