Foreign car makers plan takeover

Updated: 2011-08-23 17:19

By Qiang Xiaoji (

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Foreign car producers have begun to take more control of their joint ventures in China, sidelining their Chinese counterparts from business partners to factory providers, China Business News reported Tuesday.

FAW-VW Automobile Co plans to establish its own logistic and sales networks, a key indicator of a potential takeover, industry insiders told the paper. The company has already started to reassess contracts with secondary dealers in more than 30 cities.

Mercedes-Benz's Beijing unit and Mercedes-Benz China are also rumored to have started a restructuring of their sales channels. Industry insiders believe that Daimler AG has played a key role in the process.

The booming car market in China has prompted foreign car makers to consider establishing wholly-owned sales enterprises to replace old sales models.

China's vehicle sales totaled 13.6 million units in 2009, overtaking the United States as the world's largest auto market. The sector experienced its first year-on-year sales drop in April since 2009. However, the market picked up in June, and passenger vehicle sales grew 5.3 percent from a year ago in the first half of this year.