Close collaboration is required in product development, but the Chinese side needs less technical assistance than ever before.
Photo by Kuang Da
By ZHOU Shuqi
Leading joint venture brands in the Chinese automotive market, which have held dominance for decades, are feeling the pressure and resetting, handing over the leadership of EV development to their Chinese counterparts.
FAW-Volkswagen plans an independent new energy vehicle marque, Dongfeng Honda already has an independent new energy badge, and Dongfeng Nissan is also transforming.
The reset reflects the pressure Chinese management felt from the mismatch between EVs developed overseas and the Chinese consumer market. The penetration rate of EVs from independent brands is 51 percent, for mainstream JVs, it is only 6.4 percent.
The target consumer base of joint venture companies is shrinking, and consumers negatively perceive previous attempts. A new brand means breaking free from existing constraints and pursuing new strategies.
Automotive analyst MEI Songlin is cautiously optimistic about the new model. He believes consumers have formed a fixed impression of traditional JVs and breaking with existing fuel vehicle brands will allow the new brand to carve out its own identity. Independent brands must distance themselves from traditional fuel brands.
Another issue is the allocation of decision-making power between the two parties. Close cooperation and rapid response are required in product development. Currently, the Chinese side does not need much technical assistance overseas.