China proving to be a tough place for US firms

Thread Rating:
  • 0 Vote(s) - 0 Average
  • 1
  • 2
  • 3
  • 4
  • 5
#11
BMW China dealers fined for price fixing
AFP AUGUST 15, 2014 10:30AM

Four Chinese dealers of German automaker BMW have been fined about 1.6 million yuan ($A280,000), authorities have said, as the government steps up a high-profile anti-monopoly campaign involving a number of foreign brands.

The dealers in Wuhan in the central province of Hubei have been ordered to pay the penalties for "forming a price alliance", provincial authorities said this week.

The dealers had agreed to consistently charge a fee for the pre-delivery inspection of cars, which falls under "the obligations and responsibilities" of the auto maker and its dealers, the statement said.

"This is price swindling behaviour and must be resolutely stopped immediately," the authorities said.

The dealers were each fined between 150,000 yuan and nearly 940,000 yuan.

China has in recent months launched high-profile probes into alleged violations by a host of foreign firms in a range of different sectors including pharmaceuticals, technology and baby milk, raising fears that overseas companies are being targeted.

China's Ministry of Commerce last week released a statement emphasising that the country's six-year-old anti-monopoly law did not discriminate between foreign and domestic companies.

The European Union Chamber of Commerce in China expressed concern that European businesses were "increasingly considering the question of whether foreign companies are being disproportionately targeted".

Auto firms are the latest to be investigated, and last week the government pledged to sanction Audi, owned by Volkswagen, and Chrysler of the US, now part of Italy's Fiat group, without stating what penalties they would receive.

On Monday, Audi announced it will accept punishment for breaching Chinese anti-monopoly laws.

The Hubei authorities also said in the statement they were working on the penalties to be meted to manufacturers and dealers of other auto brands including Audi.

Several car companies have announced price cuts in response to the inquiries.

Beijing considers using a dominant market position to set prices as a form of monopoly. Violators' "illegal gains" can be confiscated, and they can be fined up to 10 per cent of their sales revenues from the previous year.
Reply
#12
PUBLISHED AUGUST 19, 2014
Merc found guilty of price fixing in China: report

[SHANGHAI] German carmaker Daimler AG's luxury brand division Mercedes-Benz has been found guilty of manipulating prices for after-sales services in China, the official Xinhua news agency reported, citing authorities in Jiangsu province.
An array of industries, from milk powder makers to tech firms, have been coming under the spotlight in recent years as China intensifies its efforts to bring companies into compliance with a 2008 anti-monopoly law. That legislation allows the country's anti-trust regulator, the National Development and Reform Commission, to impose fines of up to 10 per cent of a company's Chinese revenues for the previous year.
The car industry has been under particular scrutiny, with a wave of investigations in the world's biggest car market prompting carmakers such as Mercedes-Benz, Volkswagen AG's Audi, and BMW to slash prices on spare parts in recent weeks.
The Jiangsu Province Price Bureau, which launched its investigation last month, found evidence of anti-competitive practices after raiding Mercedes-Benz dealerships in the eastern coastal province as well as an office in neighbouring Shanghai, Xinhua said in its report on Sunday.
Reply
#13
http://www.businesstimes.com.sg/premium/...g-20140821

PUBLISHED AUGUST 21, 2014
China fines Japanese auto parts makers for price fixing
12 firms fined 1.24b yuan in total amid increased antitrust scrutiny

Antitrust fines: The auto components involved in the price fixing were used in more than 20 car models manufactured by Toyota Motor Corp, Honda Motor Co, Nissan Motor Co, Suzuki Motor Corp and Ford Motor Co. - PHOTO: REUTERS
[TOKYO] China found a dozen Japanese auto parts makers guilty of price fixing and doled out the biggest antitrust fines in the country since relevant rules came into effect six years ago.
Total fines amounted to 1.24 billion yuan (S$251 million), the National Development and Reform Commission, China's main economic planner, said on its website. Sumitomo Electric Industries drew the heaviest fine at 290.4 million yuan - the biggest-ever antitrust penalty for a single company - followed by Yazaki Corp.
While China follows the US, Europe and Japan in punishing parts makers, the fines come as foreign businesses increasingly voice concerns that an era of heightened regulatory scrutiny is dawning on the world's second-largest economy. Global car manufacturers, technology companies and food companies have faced antitrust probes in the country since last year.
"This sends a warning to companies engaging in global price fixing that they should beware of China," said Chen Danzhou at the University of International Business and Economics in Beijing. "The government is getting more aggressive as it tries to make a structural adjustment to the market."
Reply
#14
China says Qualcomm is willing to resolve dispute
DOW JONES AUGUST 25, 2014 10:30AM

Chinese regulators said Friday that Qualcomm is willing to make efforts to resolve a dispute that prompted an investigation by Beijing into the company's pricing practices there.

The National Development and Reform Commission, China's economic planning body, said in a statement on its website that it met on Thursday with a delegation from the wireless-technology company, including President Derek Aberle. "Qualcomm expressed its willingness to make improvements," the statement said.

The statement didn't provide further details. The NDRC didn't immediately respond to requests for comment. Qualcomm said in an emailed statement that executives met with NDRC officials, discussing "several topics in an effort to reach a comprehensive resolution." The company is cooperating with the commission, the statement said, adding that the company declined to comment further.

Chinese regulators have been investigating whether Qualcomm holds monopoly power over important technology.

Qualcomm is one of several multinational companies under pressure in China, where regulators are tightening enforcement of antitrust law.

The Qualcomm investigation has attracted attention as China has prepared to roll out a new fourth-generation telecommunications network that relies on the San Diego company's technology. Officials have told state media the probe is nearing a conclusion.

The NDRC regulations the parts of China's antitrust law that pertain to pricing.
Reply
#15
China Volkswagen probe not tied to antitrust investigation
DOW JONES AUGUST 28, 2014 10:00AM

A Chinese government probe into current and former executives at a Volkswagen AG joint venture isn't tied to an antitrust investigation into foreign auto makers, according to the auto maker and its local partner.

The probe comes as foreign carmakers are under the spotlight for the prices they charge Chinese consumers for spare parts and services. Still, Volkswagen's Chinese partner, government-controlled FAW Group Corp., said the two executives were put under investigation following China's latest round of routine inspections of official conduct at state-run companies, and not as part of the antitrust probe.

"There is no need to speculate too much about the connection," said an FAW spokeswoman, who added that the company is cooperating.

Representatives for Volkswagen and its joint venture with FAW, FAW-Volkswagen Automobile Co., said the two inquiries weren't related. They didn't release additional details.

The Communist Party's Central Commission for Discipline Inspection said Tuesday it has launched a probe into Li Wu, a former deputy general manager at FAW-Volkswagen, and Zhou Chun, a deputy general manager of the joint venture's Audi sales division. The regulator cited "suspected serious violations of discipline and law," phrasing Chinese authorities typically use in reference to corruption allegations.

The two couldn't be reached for comment, and it wasn't clear whether they had lawyers.

"Li Wu had left the company in 2006, while the antitrust campaign only came to a peak in recent months," said Li Pengcheng, a spokesman for FAW-Volkswagen, who isn't related to Mr. Li. He said the company couldn't comment further on the investigation.

Volkswagen's Audi arm is one of several foreign automakers under scrutiny for the way they sell spare parts and services in China, the world's largest car market. Chinese antitrust officials have said they found evidence of price manipulation by Audi, Daimler AG's Mercedes-Benz and Fiat SpA's Chrysler for spare parts and aftermarket services. The companies have said they are cooperating.

FAW-Volkswagen, established in 1991, makes VW and Audi cars in China, where foreign automakers are required to team up with local partners to build cars domestically.

Chinese officials often train their sights on state-owned companies as they look for potential corruption, a process that had increased in intensity amid an anti-graft effort launched two years ago by Chinese President Xi Jinping.

FAW and its joint venture with VW has come under scrutiny before. In June 2012, China's top auditor, the National Audit Office, said that it found malpractice by FAW and FAW-Volkswagen, including failure to record sales of about 170 new cars. A few days after the audit report was issued, local anticorruption officials launched an investigation into Jing Guosong, then deputy general manager of FAW-Volkswagen's sales division, said the joint venture at that time. FAW and the joint venture on Wednesday declined to comment on Mr. Jing.

Established in 1953, FAW, previously known as First Automotive Works, was China's first post-revolution auto maker. Former President Jiang Zemin worked there from 1956 to 1962, according to official information, and he visited FAW's operations on at least three occasions after he became the Communist party's boss in 1989, according to the company's website.
Reply
#16
Adobe to shut China research arm
AFP SEPTEMBER 26, 2014 9:15AM

US software giant Adobe will shut its research arm in Beijing, laying off 350 people, as foreign technology firms face a worsening business climate in China.

US tech firms, including Microsoft and Qualcomm, have come under investigation over business practices, the latest in a series of industries to face tougher government scrutiny.

However, Nasdaq-listed Adobe denies the move is a reflection of the Chinese market and says it is part of a broader strategy to place technical teams in fewer locations, according to the statement provided to AFP on Thursday.

"The move will not affect Adobe's overall level of investment in R&D (research and development) and is not an indication of financial performance in China or worldwide," the statement said, adding that its Beijing research arm will be shut by the end of 2014.

Adobe, which is based in San Jose, California, in September said net income for the three months ended August 29 had slumped 46 per cent year on year to $US44.69 million ($A48.35 million).

"We are committed to China as a long-term market, and will continue our sales presence nationally as always," the firm, which makes the Acrobat and Photoshop software, said.

Chinese authorities have raided the offices of Microsoft as part of an anti-monopoly investigation aimed at its Windows operating system -- which is used on the vast majority of computers in China -- and the Office suite of programs.

The head of the government agency investigating Microsoft for what it calls "monopoly actions" in August said the investigation includes the way the US giant distributes its media player and browser.

Chinese state media has reported that US chip maker Qualcomm is also being probed over an alleged monopoly position in the mobile phone chip market.

Some analysts have linked the investigations to a US government move to indict five members of a Chinese military unit for allegedly hacking American companies for trade secrets.
Reply
#17
Yes, China proving to be a tough place for US firms, but China still too important to be ignore by any of them. Big Grin
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
Reply
#18
To be taken seriously, you need to be an elephant in the room. No point being a parrot verbally repeating what you want to do.

That's what Deng realised 30 years ago. Some big countries still don't get it.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
Reply
#19
Tesla's China challenge: getting chargers installed
DOW JONES SEPTEMBER 29, 2014 10:00AM

BEIJING— Tesla Motors Inc. has big ambitions for selling its electric cars in China. But first, it has to get its chargers accepted by skeptics, such as the property manager at the Tonghui Riverside residential complex.

That delicate task falls to Huang Weiguo, who leads a team of Tesla contractors who install charging stations at the homes of new Tesla owners in Beijing. Part technician and part diplomat, he deals with anxious garage workers, puzzled security guards and dubious building managers while laying the groundwork for the luxury car maker in China.

On a recent summer day, his charm was failing him. The mission was to install a charger for a new customer outside a teahouse at the white-faced commercial and residential complex. But three hours into the process the property manager showed up, and he proved to be bullheaded. "Remove it," he said.

Mr. Huang explained the tea shop's owner had just bought a Tesla and had authorized installation of the six-foot-tall charging station and its tangle of cables. He offered the sweating manager a cold bottle of water.

The manager wasn't persuaded. "It's our call to decide what gets installed around here," he said.

Mr. Huang was philosophical. "We have to be patient and calm down," he said, preparing to leave the job unfinished while pondering his next steps.

China presents unique challenges for Tesla and other electric-car makers. Its people tend to live in apartment buildings rather than the single-family homes commonly found in the U.S. Low-rise multifamily housing makes up 74% of all urban housing in China, according to a 2007 estimate by consulting firm Chreod Ltd.

That means the family garage is a rarity in China. People instead tend to park in shared garage complexes or on the street. That complicates setting up the home charger that is essential to keeping a Tesla running. Occasionally, it also makes wary neighbors and property managers hurdles to ownership.

The process in China is "really very hard," said Shawn Gao, who is responsible for overseeing installations for Tesla across the country. "The technical part is not the big issue. Getting approval from property-management companies is."

Jacky Tan, a Shanghai engineer, took delivery of his new Tesla Model S in June. But it spends little time in the parking spot he bought for it at his apartment complex. The complex's property-management company objected first; then residents expressed worry that the chargers would cause power surges or affect their power bills.

"No matter how hard Tesla and I explained to the neighbors that it won't affect their life, the committee refused to give us the green light," Mr. Tan said. Tesla later installed the charging station at Mr. Tan's workplace instead, an arrangement that he says is unsatisfactory.

Chargers are a chicken-and-egg problem for electric-car makers. Without one, there can't be the other. And sales of electric vehicles so far in China have been disappointing, totaling 70,000, including buses, well short of Tesla's goal of half a million by 2015, according to Stephen Dyer, a partner in the Shanghai office of consultancy A.T. Kearney. "China is still way off target," he said.

Electric car makers are only now trying to address the problem here.

BMW AG recently launched its pure electric BMW i3 and plug-in hybrid BMW i8 in China, and it has teamed up with local partners to install 50 charging stations in Shanghai. BYD Co. and Daimler AG will work with Switzerland-based ABB Ltd. to supply wall-mounted chargers to buyers of their jointly made Denza electric cars. Nissan Motor Co. this month released its first electric car here.

Tesla has tried to forestall the problem of buyers ending up with cars with no power. It said earlier this year it wouldn't deliver cars unless local charging stations were available, frustrating some early buyers. One owner, irate at the delay, smashed the windshield of his Tesla when it was delivered and posted a picture online. In June, another wealthy Tesla enthusiast built his own network of charging stations so that he could drive to Guangzhou, some 1,300 miles from Beijing.

In August, the Palo Alto, Calif., company signed a deal with telecommunications provider China Unicom to build together 20 superchargers and 400 charging posts in 120 cities to speed up the process. It also has tie-ups with property developers such as Soho China Ltd. to install charging stations in developments. Other partnerships are in the works.

A widespread network of public chargers is important because Tesla sees China as its biggest international market within three years, eventually overtaking even the U.S., said Veronica Wu, its China chief.

It hopes to install a network in China of 100 superchargers, which charge cars faster than regular chargers, and to have 20 sales outlets by the end of next year.

An August survey of 200 potential car buyers throughout China by consultant A.T. Kearney found that concern over the lack of charging stations was the biggest reason stopping people from buying electric cars.

Tesla's Mr. Gao said his installation teams are successful nine out of 10 times. But each faces challenges they might not see in the U.S. Building management and residents' associations often worry that charging a Tesla could put too much strain on a building's power supply, which can sometimes be unstable in China. In addition, installation can often involve getting approval from one of China's state-controlled electricity providers, a process that had little precedent until this year.

Tesla points to progress on several issues. Recent regulations in Beijing now require that about 20% of parking lots attached to new buildings be capable of housing charging units. A recent policy paper from China's State Council was dedicated to infrastructure issues.

"It's definitely getting better," said Ms. Wu, Tesla's China chief.

Mr. Huang, the Tesla contractor, said the troubles at Tonghui were unprecedented in his experience. "This is the first time we were shut down in the middle of the process," he said, adding that breakdowns in communication between his team and the property managers are frequent. "Sometimes they refuse to talk to us and they don't give a reason," he said.

But Mr. Huang said he is used to such a reaction, adding that typical Beijing property managers can't be swayed by flattery or dining invitations. "It's our job to come up with counterproposals," he said. "I serve people, serve our clients."

As of mid-September the dispute over the charging installation at Tonghui Riverside hadn't been resolved. A manager at the property who gave his surname as Song said that the installation needed approval from local officials and "if only one or two cars need this charger, we don't really see the need."
Reply
#20
Japan car makers skid in China
DOW JONES NOVEMBER 04, 2014 1:45PM

China’s slowing car market isn’t good news for any car brand. But it’s turning out to be especially bad for the Japanese.

The Hong Kong shares of Dongfeng Motor fell 4 per cent Monday after the Chinese joint-venture partner of Nissan , Honda and PSA Peugeot Citroën reported that its overall third-quarter earnings slumped 16 per cent from the year before. The income it earned from these JVs fell 1.1 per cent.

Some slowdown in earnings would be understandable, considering Chinese car sales grew 8 per cent year-over-year last quarter, compared with last year’s 16 per cent. Yet Dongfeng’s Japanese JVs actually sold fewer cars during this period, down 14 per cent at Nissan and 34 per cent at Honda, says Sanford C. Bernstein. The PSA brands performed better.

These woes aren’t specific to Dongfeng. Guangzhou Automobile , another Hong Kong-listed car maker allied with Toyota, Honda and Fiat , also said last week that its third-quarter JV income fell 30 per cent from a year ago.

Partly, individual Japanese brands have miscalculated. Honda set ambitious Chinese sales goals and shipped more cars to dealers than they could sell, forcing the company to trim its target last week. Its products also look old and, judging by the widening discounts dealers have to offer, sometimes too expensive. Nissan similarly shipped too many cars, now stuck in inventory.

These brands may also be experiencing a broader image problem. Chinese protesters smashed Japanese cars in 2012 when an island dispute boiled over into nationalist rage-a dispute that still simmers today. That’s one reason why a Bernstein-led survey of 40,000 Chinese consumers found that 51 per cent would never consider owning a Japanese car. Japanese brands as a whole recovered a little bit of market share after the 2012 protests, but lost again this year, according to Macquarie data. The main winners are the German makers and Ford.

More such anti-Japanese sentiment bodes ill not only for Dongfeng and Guangzhou Auto, whose Japanese JVs typically drive earnings. It will also hurt Japanese car makers. In the year that ended March, Nissan sold 24 per cent of its global volume in China and Honda 18 per cent, says Nomura. Toyota is relatively insulated, selling only 9 per cent of its cars in China and holding on to its position in China better this year.

The less enthusiastic Chinese consumers become about cars, the more they will get picky about car makers. Chinese brands are already losing out. The Japanese look like they’re next.
Reply


Forum Jump:


Users browsing this thread: 8 Guest(s)