Joint ventures' own brands fail to attract widespread support
Proposals by Sino-foreign joint ventures to establish own brands have been a focal point of debate in the Chinese automobile industry.
Despite initial voicing of support by the Ministry of Industry and Information Technology and National Development and Reform Commission, the latter later confirmed that there were no clear policies in the works to support such projects.
Ordinary citizens have also voiced their displeasure. In a recent survey by a media source, almost 90 percent of participants said they were 'relatively disappointed' in JVs' own brands. Only six percent of the 1,384 people polled expressed support for the projects.
Own brand projects were conceived as a method for joint ventures to bring foreign technology to China, allowing local manufacturers and industry to develop further.
All intellectual property rights to the brands' models and technology used would belong to their JVs, and not to foreign manufacturers.
However, there are fears that multinational manufacturers will only offer outdated technology and models for joint venture own brand projects.
According to an analysis report by management consulting firm A. T. Kearney, own brand projects have failed to help Chinese enterprises learn more about advanced technology from their foreign partners.
At the same time, JVs' own brand models, which are priced below most foreign vehicles, further populate the already crowded market, making it even harder for fully home-grown local manufacturers to compete.
According to statistics from the China Association of Automobile Manufacturers, sales of passenger automobiles made by domestic manufacturers were at a record low last month.
Several of these manufacturers have previously complained that JVs' own brands are hindering their sales growth.