Wang Yi Gao

Forklift companies are avoiding joint ventures and opening their own assembly plants in China in a dramatic change from past practices.

This observation comes from Wang Yi Gao, China Industrial Truck Association (CITA)'s export manager and the former general manager of Linde (China) Forklift Truck Corp Ltd's Beijing branch, during a visit to Forkliftaction.com's Brisbane office on Tuesday.

"Due to the different management strategies [between east and west], many foreign manufacturers in China have bought back their shares from joint venture partners," Wang said.

"Now, all foreign investors are going to be independent. They are not going for joint ventures."

He said of the 76 forklift manufacturers that were CITA members, only a few were joint venture companies.

Linde, TCM and Hyster are among the forklift manufacturers that entered the Chinese market and established joint venture partnerships with local companies. Newcomers Jungheinrich (2005), Komatsu (2005/06) and Toyota (2003) entered the market on their own.

Wang wouldn't attribute the shift to clashes between Chinese and Western management styles, but said it is evident incoming foreign companies are shunning joint ventures.

Crown, Mitsubishi and Pyroban have established plants independently in China in the past 12 months (Forkliftaction.com News #294), (Forkliftaction.com News #283).

Meanwhile, it is believed that TCM is unlikely to renew its partnership with Heli when its 10-year agreement expires next year. The companies currently have a 50-50 joint venture.

Linde established a joint venture with Xiamen Forklift in December 1993, but has gradually bought out Xiamen's shares over the years.

Wang, who explores domestic and overseas market opportunities for CITA's 165 members, is currently researching the Australian market.

Look out for Forkliftaction.com's profile on Wang next week.