At 3 p.m. today, Sichuan Hong Kong Hong Kong Group will hold a signing ceremony at the Crowne Plaza in Chengdu to establish "Hong Kong Hong Kong Enterprise Management Co., Ltd." in collaboration with ITOCHU Corporation. This marks the first domestic "China to Eat Crab" event, where China's automobile industry opened its doors to foreign investment and also represents the first joint venture between a Chinese company and a Fortune 500 global enterprise in the modern automotive services sector. According to reports, this joint venture is one of the key foreign investment projects in Chengdu for 2005. Beyond traditional vehicle sales and maintenance, the two partners are exploring new areas such as used car markets, auto finance, and the entire automotive value chain. This initiative reflects a broader trend of foreign capital entering the Chinese auto industry and reshaping its landscape. The Chinese auto market has become a hotbed of competition, with both domestic and international players rushing to capture a share. As of now, all of the world’s major automakers — including the “6+3” groups (GM, Ford, DaimlerChrysler, Toyota, Volkswagen, Renault, along with PSA, BMW, and others) — have established production partnerships in China. Major domestic companies like SAIC, GM, Wuling, FAW, and Dongfeng have also formed strategic alliances, shaping the current structure of the industry and laying the foundation for multinational presence in the country. Lu Zhiqiang, a researcher from the State Council Development Research Center, noted that China’s auto industry has entered a new phase of development. The growing attention from both domestic and international players is no coincidence. He pointed out that not only are domestic manufacturers competing with global giants, but the after-sales service, maintenance, used car, and auto finance sectors have also become key battlegrounds. Foreign investors are keen on building efficient and comprehensive sales networks, and forming joint ventures is an effective way to do so. Despite the opportunities, the Chinese auto industry still faces significant challenges. Its scale and service standards are not yet sufficient to meet the rising demand. With the influx of foreign capital, local auto sales and service industries are under pressure to align with international standards. This means a shift in the marketing model and a need for more professional, globally-oriented operations. A 4S shop manager in Chengdu, who has been running a brand for eight years, shared his perspective: “In the domestic auto market, profits from 4S stores are declining. In Europe, they’ve already started changing their dealership model, phasing out exclusive agents to reduce circulation costs. The future of the auto industry lies in diversification, with foreign capital entry, joint ventures, and expanded sales networks becoming central to market development.” Industry experts suggest that the most stable segment of the automotive supply chain — after-sales services — has become a highly attractive target for foreign investors. With overproduction in developed countries, many global automakers are turning their attention to China. However, China currently lacks a large and effective global sales network. This creates intense pressure for local companies, as both pre-sale and after-sale segments are seeing heavy investment from foreign players. To adapt to these changes, China’s auto industry must adopt a balanced strategy — what analysts call “walking on two legs.” This means maintaining and strengthening joint ventures while also pursuing independent development. By fostering a virtuous cycle between cooperation and self-reliance, Chinese companies can enhance their capabilities and create strong, independent brands. Focusing on high-quality services, professional operations, and a global outlook will be essential for long-term success in this competitive market.

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