Trade barriers and new regulatory demands imposed by Beijing almost monthly have failed to prevent foreign carmakers from making outsized profits in China, even as the groups complain about unfair treatment.
Most large automakers make at least one-quarter — and in some cases more than half — of their profits in China, far more than the share of vehicles sold there in many cases, recent analysis shows.
That is despite policies directed at foreign car companies by China’s government, which imposes tariffs on imports of as high as 25 per cent.
The only way around these is to build plants locally, and that can only be done in a joint venture with a local state-owned company. That partner frequently does not do much more than act as a “toll man”, according to Robin Zhu, a Bernstein analyst based in Hong Kong.
Policymakers in Berlin and Washington have started to press Beijing on its restrictive regime for foreign carmakers. Beijing, in April, said it would do away with the joint venture requirement for foreign investors in the car industry, but has not given a timeline or any details.