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Business Insight

Time for international carmakers to change partners in China?

Working with local tech companies could be better option than going solo

Most cars sold in China still carry foreign brand names, but domestic ones have been gaining ground.   © Reuters

International automakers have earned hefty profits from China's emergence over the past two and half decades as the world's largest car market, yet have felt unsatisfied because of a regulatory requirement to share these earnings with a local partner.

The announcement last month that the rules requiring foreign carmakers to operate in 50/50 joint ventures with local automakers will be rescinded after years of lobbying might suggest that foreign companies will soon be able to boost profits by raising their ownership in their local operations to 100%. (Their share of profits was usually already more than half when trademark licensing and other fees were included.)

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