Nissan's Dongfeng deal a huge jump for foreign carmaker

Nissan''s $1 billion investment in Dongfeng confirms that it''s not always the first entrant to the market who reaps all the benefits. By waiting for WTO rules to bite, Nissan has taken a huge lead over its rivals.

Nissan Motor's $1.03 billion investment for a 50% stake in a joint venture with one of China's largest state-owned carmakers is a major development that shows how foreign carmakers can penetrate China's car market.

Joint ventures tend to be set up for specific time periods and with numerous conditions attached. These can include the number of models to be produced, the need to buy parts off the joint venture partner and quotas on using domestic content.

Nissan will be able to circumvent these problems, since all the assets of Dong Feng Automobile Co will be injected into the joint venture, Dong Feng Motor, creating what is in effect a direct investment in Dong Feng...

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