China shows its mighty purchasing power

China had shown its excellent progress in sales in the year 2009. The country had even left the US market behind in terms of sales. The result of such brilliant sales of Chinese auto market was that the country became the largest auto market of the world. And now once again it’s time for the country to flaunt its huge and strong  purchasing power .The reason behind is that the Ministry of Industry and Information Technology of China has offered a fresh plan for the auto makers. The new plan which will be implemented soon in the country states that the auto makers in this country (China) will have to share their electric and hybrid vehicle technology with those of the auto makers of China.

Apart from the sharing of electric and hybrid vehicle technology, the auto makers of other countries will also be asked to enter into a joint venture with any of the auto company of China. This rule will have to be followed by the foreign auto makers prior to the setting up of any electric vehicle manufacturing unit, either for the vehicles or for the components. The Chinese counterpart in the joint venture will be authorized to have 51 percent share in the joint venture. On the other side, the auto makers of foreign land will hold the remaining 49 percent of the joint venture. Now any of the auto makers which deny to accept this norm will be banned from the selling of vehicles in China, the country which has now achieved the position of being the world’s largest auto market now.

In fact, the Chinese government has announced these new norms  as a part of its strategy for becoming a world leader in green technology so that it may build future cars. A senior executive was quoted saying that the proposed norm is a tantamount to the country  (China) bullying foreign auto makers for giving up battery, electric-motor and control technology in exchange for market access. He also added that they do not like it.

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