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Ford Vs GM for Chinese Auto Market
General Motors Corp.(GM) of the United States has quietly joined in the battle for setting up mini-car enterprises in China's inland to confront its rival Ford Motor Co. (Ford).
The two US magnates started their competition in China as early as the mid-90s to get approval from the government for building motor plants in Shanghai. GM won that round of competition, permitted to set up a factory of Buick worth US$1.5 billion while Ford was only approved to found some enterprises of auto parts and to hold only a few equity rights in a poorly performed truck manufacturing enterprise in south China.
This time, the two companies have both tried hard to cooperate with Chang'an Automobile Group in Chongqing, one of China's largest mini-vehicles manufacturing enterprises, to manufacture a type of price acceptable, mini-passenger car, for this is the fastest-growing sector of China's auto market with great potential for development.
With the approach of China's entry into the WTO, the Chinese government has been shifting its focus of work. After China's accession to the WTO, its auto industry may possibly sustain the impact of the influx of low-priced imported foreign products.
Because of this worry, China has again begun to support joint auto-making ventures and give auto-manufacturers more leeway in price adjustment and in the supply of new-type cars, which had all along been under tight government control.
At present, the management personnel of the Chang'an Auto Group cherish the hope for cooperation simultaneously with the two auto companies. A local official said, "We know GM doesn't want us to cooperate with Ford, but the possibility still exists for Chang'an Group to cooperate with both American firms."
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