Bring it on. That’s the message Li Shufu, the Chinese billionaire chairman of Volvo Cars, wants the
government to give competitors in the largest auto market.
“It’s best if it’s completely open, like in the U.S. and
Europe; whoever wants to produce cars can do it,” Li, who’s
also chairman of carmaker Geely Automobile Holdings Ltd. (175), said
in an interview. “This is fair to us, it’s fair to everyone. It
would completely allow the role of the market and perhaps we
will develop better.”
Li, set to unveil the first new Volvo developed jointly
with Geely Aug. 26, has previously called on the government to
give foreign carmakers more control over their operations to
quicken competition and bring down prices. The China Automotive
Technology and Research Center, which helps draft policies, said
in June it is proposing two to three electric-vehicle making
licenses for companies other than carmakers.
In the market for conventional vehicles, Li, 51, has also
pushed for easing regulations.
China requires carmakers based outside the country to work
with local partners and enforces rules that limit the companies’
decision making. Geely, whose sales fell 29 percent by volume in
the first half to 187,186 units, is trying to boost sales by
reducing the number of brands it sells.
The government has said the country’s auto industry, with
about 110 competing brands, should consolidate and it has
threatened to cancel the permits of automakers that do not meet
the minimum production levels by October next year of at least
1,000 passenger vehicles or 50 medium to heavy trucks, depending
on their category.
China’s industry minister Miao Wei said in March local
automakers aren’t competitive enough and lack the capability to
expand overseas. He said the government isn’t working on plans
to lift the 50 percent limit on foreign ownership of carmakers.
Li said in an interview last month in Hangzhou, China, that
he welcomes entrepreneurs from information technology and other
industries to enter the carmaking industry.
“The country shouldn’t impose thresholds. But the country
should have standards. It should use the law. Whoever
manufactures the product must bear responsibility for the
products,” he said. “Whether the threshold is scientific or
fair, that’s important. At least, I think, China’s automobile
industry’s threshold now has room for adjustment.”
Geely was the first private automaker in China when it
started 17 years ago. The company paid Ford Motor Co. (F) about $1.8
billion for Volvo Cars in 2010.
Chinese brands’ passenger vehicle market share in the first
six months of this year fell to 38 percent, a 3.5 percentage
point drop from the same period last year, according to data
from the China Association of Automobile Manufacturers.
China’s state-backed auto association estimates the vehicle
deliveries will rise 8.3 percent this year.
(Volvo’s acquisition value was corrected in a previous
version of this story.)
To contact Bloomberg News staff for this story:
Alexandra Ho in Shanghai at
To contact the editors responsible for this story:
Young-Sam Cho at
Dave McCombs, Chua Kong Ho