Three years after China's Entry into WTO: Ten Major Events in China's Auto Industry
2025-10-02 11:59:40
Since China joined the World Trade Organization (WTO) three years ago, its automotive industry has undergone significant transformation. Here are ten key events that highlight the progress and international integration of the Chinese auto sector.
**Auto Finance Companies "Bloom"**
In August 2004, SAIC General Motors Financial Co., Ltd. launched in Shanghai, becoming the first auto finance company in China. Soon after, Volkswagen Finance (China) was also approved. These developments showed that auto finance companies were not only open to foreign investors but also to domestic players. The People’s Bank of China stated that if Chinese institutions met the requirements, the China Banking Regulatory Commission would consider granting approvals as well.
**SAIC Chery “Reorganizationâ€**
Anhui Chery was founded in 1997 but lacked a "skilled permit." In January 2001, Chery sold 20% of its shares to SAIC and rebranded as SAIC Chery. By June 2003, rumors emerged that Chery wanted independence. On October 18, 2003, Chery received a new business license, signaling its transition to operate independently after a six-month period.
**Dongfeng Capital’s “Fourth Jumpâ€**
Dongfeng Motor Company took four major steps: first, expanding into light vehicles and engines in Xiangfan; second, entering the car market in Wuhan; third, developing parts and components in the Pearl River and Yangtze River Deltas. Its fourth move involved listing its commercial vehicle segment in Hong Kong, aiming to raise $1 billion in financing.
**FAW Toyota Sales Co., Ltd. Established**
On October 28, 2003, Toyota and FAW announced the establishment of FAW Toyota Motor Sales Co., Ltd., with Toyota holding 32% of the shares. This marked Toyota's increased control over distribution channels in China.
**End of the “Accord Premium†Era**
In the summer of 2004, prices for models like the Guangzhou Honda Accord began to drop. A year earlier, buyers had to pay up to 80,000 yuan extra for an Accord, but by this time, the 3.0-liter model was discounted by 12,000 yuan. This signaled a shift in pricing power from manufacturers to consumers.
**Foreign Investors Invest Heavily in China**
In June 2004, GM announced a $3 billion investment in SAIC’s operations in China. VW followed with a 1.42 billion yuan investment in the Volkswagen FAW Platform Parts Co., Ltd. Hyundai also invested an additional $740 million in 2007 to build a second factory with a capacity of 300,000 vehicles.
**Brilliance Executives Sell Shares**
At the end of July 2004, media reports revealed that Brilliance’s top executives, including Wu Xiaoan, Su Qiang, Hong Xing, and He Tao, sold their shares in Brilliance China. This led to a sharp decline in the company’s stock price and triggered internal turmoil that spread across the industry.
**North-South Volkswagen Cut Prices Together**
On June 16, 2004, both North and South Volkswagen announced simultaneous price reductions. This was followed by lower prices from Dongfeng Citroen and Beijing Hyundai. It marked the largest collective price cut in the history of the Chinese auto market.
**SAIC Acquires Ssangyong Overseas**
On October 28, 2004, SAIC Motor Group signed an agreement with the creditor committee of Korean automaker Ssangyong Motor. SAIC acquired a 48.92% stake in Ssangyong Motors, marking the first overseas acquisition by a Chinese auto company.
**Shanghai GM Builds the Buick Brand**
Among all joint ventures, Shanghai GM has been the most successful in localizing the Buick brand. Over the past three years, it has developed a distinct Chinese version of Buick, increasing its popularity from 14% to 83%.
These developments reflect the rapid evolution of China’s auto industry, driven by foreign investment, domestic innovation, and growing competition on the global stage.
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