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How will mainstream auto companies compete in new JV era?

Biwen Wang From Gasgoo| November 02,2017

auto joint venture china

Shanghai (Gasgoo)- The phasing out of subsidies and dual-credit policies force NEV companies to make out clear strategies. Domestic self-owned auto brands are actively involved in the market. In sharp contrast, most JV companies adopt conservative strategies.

It is an inevitable trend that NEV will gradually replace traditional oil-fueled vehicles. Some industry analysts suggest that mainstream JV auto companies should enter into NEV market as soon as possible and conduct NEV R&D work to cope with the new competition.

Being on the initial stage for a long time in the past, the domestic auto industry has to introduce advanced foreign auto companies into domestic market to lead developments. But now the auto industry is marching towards a strong and large domestic market, in which leading JV auto companies could directly purchase auto parts with mature technologies including electric motor, electric control systems and batteries in domestic market, thus optimizing their strengths in auto manufacturing.

Apart from products localization, JV auto companies are also exploring for localized R&D in which most technologies originate from local market. Besides, products could also be customized in accordance with demands in local market. “In this way, foreign brands could blend with local blends, creating a “new JV era”. One analyst said. Experts also suggest that the in-depth localization strategy for JV companies may also involve the training of local talents and more R&D work in JV companies.

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