China's Budding Automakers Get OEM Boost
Zhang Yushuo
/SOURCE : yicai
China's Budding Automakers Get OEM Boost

 

(Yicai Global) Dec. 7 -- China's auto manufacturing industry is about to mimic its phone production, giving a fillip to wannabe and up-and-coming carmakers.

The Ministry of Industry and Information Technology has opened the way for "carmakers to join hands in research and development as well as in production" with original equipment manufacturers, it said in a statement yesterday. It is the first time the ministry has approved OEM participation in the industry.

"Qualified manufacturers can commission other manufactures to produce and process cars," the statement said. "China encourages cooperation between R&D companies and producers in the industry, and allows the former to borrow the production capacity of the latter in their application for certifications of car manufacturers and products."

The timely policy change is a "good thing," Cui Dongshu, secretary general of the China Passenger Car Association, told the 21st Century Business Herald. "It will benefit emerging carmakers, help the industry fully use current output, stabilize the post-joint venture era, and reduce management costs."

Before going into production of electric cars, Chinese automakers need to gain certification from the National Development and Reform Commission. Beijing Electric Vehicle, owned by BAIC, Qiantu Motor, Yudo Auto and 13 others have secured permission since 2016.

Traditional carmakers have already been acting as OEMs for new energy vehicle startups. Nio used the foundry service of JAC Motors. Zhengzhou Haima Automobile was the OEM for Xiaopeng Motors. Southeast Motor produced cars for Dearcc; FAW Group for Future Mobility's Byton series. WM Motor has its own production capacity in Wenzhou, Zhejiang Province and will build vehicles on its own. 

"The deep integration of internet technology, information and telecom technology and traditional automobile manufacturing technology has spawned OEM production, authorized manufacturing and other new production models in recent years," the ministry said in its statement.

"These new models have posed challenges to existing regulations," it added. "With the new rules, China must grant access to companies with new technologies, new processes, new materials, and new production methods as well as their products as soon as possible, while encouraging and promoting technological innovation and the formation of a new industrial ecology."

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Keywords: OEM , Vehicle