China's government signaled last week that it will eventually allow foreign automakers to take full ownership of their local ventures, marking the end of a decades-long rule allowing no more than a 50 percent stake of ownership in any joint venture in China.
The plan could help companies setting up new factories, especially upstarts like the electric-vehicle company Tesla Motors, which has big ambitions in the world's largest market for new cars. In recognition of this, VW, The world's largest auto manufacturer plans to restructure its operations, and to establish a new business unit dedicated to expanding the role of electric and autonomous vehicles in China.
To capitalize on the world's biggest automobile market and a population of over 1.3 billion people, many carmakers, including those from Japan and Europe, are eager to boost sales of EVs in China. And foreign auto companies have found making cars in China for local drivers quite profitable.
Resembling the plan what Volkswagen actually intends to do, Diess explained that China-based electric vehicle market is soon anticipated to dominate around the globe.More news: PM Modi, Xi Jinping Hit Reset, Military To Get The Message Too
General Motors sold over four million cars here a year ago, more than in the United States.
"That's some of the detail we've yet to see", he said.
That would make BAIC the second Chinese company to produce electric vehicles overseas, following BYD Auto, which manufactures battery-powered buses in a California factory. Those include a GM SUV, the Envision, and Volvo Cars sedans made in China for export to the United States. The E20X, promising a 300-kilometer (185-mile) range on one charge, is aimed at lower Chinese market tiers where demand is strongest. Production will start in 2019 in China, the Japanese company's first overseas production of PHEVs, it said.
That trend has been propelled by the ruling Communist Party's support for the technology.More news: Father: Sick UK child surviving after life support withdrawn
The CEO also said that VW had no plans to alter the joint-venture structure of its Chinese operations.
China's total sales of SUVs, sedans and minivans reached 24.7 million units previous year, compared with 17.2 million for the United States.
Foreign automobile manufacturers have welcomed the changes.
The changes will end shareholding limits for new energy vehicle firms as soon as this year, followed by commercial vehicles in 2020 and passenger cars in 2022.More news: Wisconsin Refinery Explosion, Fire Prompts Evacuations