By Frank-Christian Raffel
Not least on the occasion of the Beijing Auto Show 2026 China’s automotive industry is once again the talk of the town. Reason enough for MRL Advisors to highlight the ownership structure of manufacturers there.
State-owned companies dominate China’s automotive industry
- State-controlled State Owned Enterprises (SOEs) form the largest single largest single manufacturer group of the Chinese automotive industry with about 37% of the Chinese production volume
- 23% are produced by joint ventures in which an SOE holds at least 50%
- Together these are about 60% of all vehicles produced in China by clearly or largely state-controlled manufacturers
- About one third of the vehicles produced in China come from Chinese privately owned companies (listed on the stock exchange)
- Only 5% of the volume is produced by clearly foreign-controlled manufacturer joint ventures – these are BMW, Audi and Nissan
- With TESLA there is only one automobile manufacturer completely foreign-owned in China.
“Joint ventures used to be mandatory for car manufacturers – this has no longer been the case since 2022.”
Strategic partnerships with Chinese manufacturers
Cooperation continues even without joint venture constraints: Volkswagen, with a long history in China and several joint ventures with state-owned companies (SAIC, FAW), has formed a strategic partnership with the private company XPeng, for example, which according to Volkswagen is producing excellent results – including successfully adapting to “China Speed “.
However, the 4.99% stake in XPeng announced by Volkswagen in 2024 is not evident from the usual Chinese sources, which is why the group of private Chinese owners with JV partners from abroad remains unoccupied according to the list of MRL Advisors.
Europe in the focus of Chinese producers
According to surveys conducted by MRL Advisors in the Chinese automotive industry, the majority of manufacturers surveyed want to grow significantly abroad – above all in Europe, as the US market presents considerable hurdles for Chinese manufacturers.
Conclusion – more partnerships with influence
Partnerships with Chinese companies are important and appropriate in tech sectors such as the automotive industry. However, the number of companies in the industry that are clearly controlled by a foreign brand is still low after many years of the dissolution of the joint venture constraint.
In China, MRL Advisors generally advocates partner models that are actually stable and future-oriented for all partners involved in the long term. Some of the competencies of European companies from tech industries are still considered to be value-adding in China, and access to the European market is a major asset. These assets – and others – should always be adequately reflected in the design and negotiations of joint ventures in China so that the European side also retains a significant influence on the joint venture.
