Chinese Car Lobbyists Oppose Expansion of Foreign Shares, Urge Hard Line on 50 Percent Rule

Chinese auto lobbyists are doing their best to block the possibility of opening industry shares to foreign carmakers.

Amid reports that China could loosen its restrictions on outside manufacturers, the country's auto lobby has staked its claim on 50 percent shares and opposed a possible change in Beijing that would allow more foreign ownership, Reuters reported.

Reducing restrictions on outside automakers would seriously endanger Chinese control in the joint partnerships, said Dong Yang, secretary general of the China Association of Automobile Manufacturers.

"Foreign ownership being capped at 50 percent is the red line we must not cross because we need to protect our Chinese brands," Dong said in a statement posted on the CAAM website.

"From another perspective, current restrictions have not dampened global carmakers' enthusiasm whatsoever to invest in China, so why should we be more open?"

One of the biggest associations representing the car industry, CAAM comprises nearly 2,000 members that include Chinese state-owned automakers SAIC Motor, FAW Group and Dongfeng Motor Group.

CAAM's statement comes after reports that several of the country's policymakers were looking to reduce restrictions on the foreign manufacturers that work jointly in Chinese ventures.

Global automakers General Motors Co, Ford Motor Co, Volkswagen AG and Toyota Motor Corp all have partnerships in China, never owning more than 50 percent of shares.

The government is looking to lower restrictions on foreign investments including auto manufacturing, the Ministry of Commerce said during a media briefing in Beijing last month.

Dong's statement urged policymakers to protect domestic brands and to think long and hard about changing the current restrictions.

"The government shouldn't rush to make decisions that would have a huge impact on the (auto) industry," the statement said.

Despite the restrictions on outside carmakers, foreign cars dominate auto sales in China, with domestic brands taking in only a 30 percent share of the market altogether, according to Reuters.