In boost to GM and VW, China resumes incentives for foreign auto investment

http://www.autonews.com/apps/pbcs.dll/article?AID=/20130517/GLOBAL03/305189998/in-boost-to-gm-and-vw-china-resumes-incentives-for-foreign-auto#axzz2TYpsiFje

 

China will encourage foreign investment in order to increase labor-intensive projects in the central and western regions. This will reverse a policy created earlier that removed auto making firms from a list that received government incentives. This can be due to the fact that foreign investment fell in April.

An analyst with Guotai Junan Securities Co. in Beijing said, “The change in policy direction is meant to boost foreign investment and economic growth rather than for the need of the auto industry.” This could be bad for domestic automakers because they are no match for the giant joint ventures. This also goes back to the fact that China seems to still be concerned with the economy and not domestic companies. I believe this will bring many questions from the people of China.

1 comment to In boost to GM and VW, China resumes incentives for foreign auto investment

  • Ah, so the government will no longer fight the provinces over permitting additional capacity, and perhaps outright new entry. To follow up, check where the Chrysler plant will be, and where PSA is.

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