Shares of major Chinese carmakers faltered during yesterday’s trading in response to the government’s announcement to remove foreign ownership caps on domestic production, the Financial Times reports, as markets question the ability of China’s firms to go it alone.
Hong-Kong listed Guangzhou Automobile Group (GAC) finished down 10%, whereas Shanghai’s SAIC Motor Corp., known as the joint-venture partner of General Motors, also fell during early trading.
Other big names to see swings include Warren Buffett-backed BYD and Shenyang-based Brilliance.
Under the new legislation, foreign firms looking to operate in China will no longer have to enter into a joint-venture with a local partner company that caps their ownership at 50%. Instead big brands from Europe, the US, and Japan will be able to wholly own factories of all vehicle types by 2020.