Khaberni - The Chinese Ministry of Industry and Information Technology announced the cancellation of production licenses for eight companies operating in traditional automobile manufacturing, along with their removal from the national registry of manufacturers, as part of a plan to reorganize the market and address overcapacity.
According to multiple journalistic sources, the decision comes amid rapid transformations in the Chinese automotive sector, with increasing reliance on electric and hybrid vehicles and declining profitability of many companies.
The list included notable local Chinese brands that have suffered from financial crises and decreased competitiveness.
According to journalistic sources, global and Chinese companies are moving towards closing some factories and restructuring production lines, while experts expect these measures to improve the quality of exported cars and enhance post-sales services.
According to reports, the automotive industry in China is entering a new phase of restructuring and market streamlining amidst fierce competition between traditional companies and electric car manufacturers, coinciding with a slowdown in domestic demand and increasing regulatory and technological pressures.
These developments come at a time when the Chinese market is witnessing unprecedented price competition, prompting many companies to restructure their operations, reduce costs, and seek external growth opportunities through expansion in export markets.
These developments also come due to weaknesses in budgets, scientific research, and development compared to other major companies operating within the Chinese market, in addition to falling behind in embracing electric transition, smart systems, and failing to pass new stringent and mandatory reliability tests.
According to reports, the coming years will witness more mergers and market exits among less competitive companies, and those more advanced technically and better able to adapt to the rapid transformations in the global automotive industry.
Furthermore, a representative from the vehicle sector of the Jordan Free Zones Investors Association, Jihad Abu Nasir, confirmed that China's decision to cancel the licenses of several traditional car manufacturing companies falls within a process of reorganizing and restructuring the Chinese automotive sector, and does not imply the disappearance of these brands or cessation of services provided to their users.
Abu Nasir told the Jordan News Agency (Petra) that many of the brands affected by the decision have a wide distribution within the Chinese market, with some operating over a million vehicles, making the continuation of maintenance services and parts supply necessary and natural in the coming years.
He added that most of these brands are part of industrial groups and major parent companies, hence the responsibility for after-sales services and spare parts will remain through the owning companies, indicating that what is happening in many cases is closer to processes of mergers, acquisitions, and restructuring within the sector, and not a complete cancellation of the brands.
He also emphasized that the presence of these brands in the Jordanian market is relatively limited, and the numbers of vehicles related to them are not large compared to other brands, meaning there are no significant implications on the local market.
