Joint ventures now represent only 1/3 of Chinese production
- The evolution of the production volume of passenger cars in China (which really started in the early 2000s) was based on two very distinct processes, the first by giving free rein to Chinese brands to produce their own vehicles, sometimes copying foreign productions, and this only until the 2010s when Chinese carmakers now felt capable of innovating on many points, including exterior design (which was the most visible point of copying), and the second which simply consisted of asking Chinese carmakers to produce foreign cars (European, Japanese, Korean, American) under license, via joint ventures, which could allow these Chinese carmakers not only to produce cars in large numbers - based on significant Chinese demand - but also to access advanced technologies in terms of engines, safety, design and on-board electronics. By working alongside foreign engineers and designers, local teams acquired technical and managerial know-how that accelerated their professionalization. Producing under license required Chinese carmakers to meet international quality standards, which improved their reputation and competitiveness. Once the skills were acquired, Chinese brands were able to develop and export their own models, becoming the world's leading vehicle exporters today. But what happened in China is nothing new, as Japan and then Korea had followed a similar approach.
- Both strategies allowed for a parallel increase in the volume of Chinese automobile production until 2020, the date of the Covid crisis. From that date, impacted by the electrification of vehicles decided by the Chinese government, the production of JVs began to decline while the production of Chinese brands increased dramatically, so that by 2024, out of 27.5 million cars produced in China, 18 million will be produced by Chinese brands and 9.5 million by JVs. And the gap will continue to grow.