China will allow Volkswagen AG's foreign automakers to own Ford Motor Co. to own more than 50 percent of local ventures, removing a two-decade restriction and global companies given a boost trying to conquer a larger share of the world's largest car market.
In a move to help electric car makers like Tesla Inc. ownership limits for new energy vehicles will be removed this year, National Development and Reform Commission said in a statement on its website Tuesday. China will abolish the limit for commercial vehicles in 2020 and for passenger cars in 2022.
Potential beneficiaries are companies of Daimler AG and BMW AG until General Motors Co. and [1
The German automakers all benefited from the news and returned earlier losses. China accounts for about half of Volkswagen's brand sales, while the world's largest auto market is also the biggest buyer of luxury Mercedes, VW Audi and BMW vehicles. Volkswagen even rose by 0.9 percent to 173.48 euros. Both BMW and Mercedes manufacturer Daimler rose by about 0.5 percent.
Above all, Elon Musk's Tesla benefits from the relaxed ownership rules that apply to electric cars this year. Musk was unable to reach an agreement to open an assembly plant in China after negotiating with the Shanghai government for more than a year. The pages did not match ownership, people said in February. The risk of higher import taxes triggered by trade relations between China and the US would be eased if Tesla were able to secure production.
In recent years, China has begun to promise the final abolition of capping. China requires foreign automakers to engage with domestic partners since 1994 to operate in the country, with the foreign company holding no more than 50 percent of the shares.
For years, the so-called "50:50 rule" sacred cow for the auto industry was considered necessary to gain time for local automakers to gain the technology and build their brands before allowing foreign automakers unrestricted access to the market.
– With the support of Ying Tian, Christoph Rauwald, Elisabeth Behrmann and Kevin Buckland