By on November 13, 2008

A few days ago, we told you that the Chinese government will enact “nine measures” to prop up the ailing auto export sector. In the meantime we got our hands on the nine measures. Turns out (some may say, in typical Chinese fashion) that it’s only eight. 8 is a lucky number in China. Some of the measures are fluff, such as government support for car and parts shows, help for ailing shipping companies, advertising support (oddly, targeted at “Russia, Ukraine, South Africa, Vietnam, and Iran,”) and a ban on exporting used Chinese cars. Here are the biggies:

Chinese exporters will get their sales tax back on exports. Before, only seven percent of the 17 previously paid were refunded. Instant price reduction of 10 percent on wholesale. Government money and other support is coming for “testing, certification, inspection” (a.k.a. fatal crash test avoidance). Chinese car companies can invest abroad to obtain foreign R&D without the help of pesky joint venture partners (i.e. same as above). And the Big Kahuna: harmonize certification requirements between the ECE countries and CCC China, via “mutual recognition” of certification results in order to “save certification cost.” Didn’t we tell you there’s a deal in the works? Notably absent: the U.S. of A. But with global automakers seeking to reduce costs and build world cars, it’s only a matter of time before the Americans join the fray. And then another ten years before the deal goes down.

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12 Comments on “China to Harmonize Safety Regs with EU (US, Not So Much)...”


  • avatar
    johnny ro

    more like we wont buy utilitarian vehicles that they want to export.

  • avatar

    It’s pretty presumptuous to assume that the reason the US wasn’t mentioned in China’s near-term regulation harmonization objectives was because the car market here isn’t “prosperous enough.” Don’t think for a minute that the Chinese aren’t licking their chops at the idea of selling their cars in the largest auto market in the world. They just are aware that US consumers are among the most demanding in the world. Do you really think a car shopper in Iran has the same expectations for quality and safety that one in the US does? China’s plan is to get their stuff together first, then attack the US market.

  • avatar

    ChrisHaak :

    Agreed. Text amended.

  • avatar

    Weeeeeeellll, from my perspective, overlooking the nightly skyline of Beijing from the 39th floor, it looks like this:

    The FMVSS standards of the US are a tough nut to crack. Not that they are fundamentally different from the ECE standards (which more and more become the standard for the rest of the world except the U.S. and Canada.) They are totally different. In many ways, they are more lax than the ECE norms. A brakepad made from chickenshit would be legal in the US. In ECE countries, a brakepad must be certified to not differ more than 15% from the OEM part, and it must be produced to comply.

    The Chinese CCC regs are a virtual mirror image of ECE. Just with Chinese (GB or Guobiao) standards. Electrical is based largely on IEC. CCC and ECE are much easier to bring under one hat. After all, despite its name, ECE is a standard of the United Nations.

    Many (also in the US) have argued that the US and Canada should adopt ECE and get it over with. Was blocked by Detroit. Canada made some baby steps and adopted a few ECE regs. Maybe, part of any bailout should be to force Detroit to adopt ECE as
    the rest of the world did.

    Having said that, I agree that China will get its act togeteher and attack the US market later.

  • avatar
    John Horner

    “the largest auto market in the world.”

    Just barely true last year, and probably not true for 2008. Europe is likely to be a larger, and more stable, car market in 2008 and beyond.

    One by one, the US’ various claims to being the biggest and best ____ are falling. All those jobs we just couldn’t wait to ship out of country in return for a booming “service sector”??? Sure could use a few million of them back.

    One of the ways the insistence on exceptionalism is hurting the US is our adherence to only-here standards. I wonder how much the aborted conversion to the metric system has cost the US? A mars lander mission was destroyed because of a failure to standardize on the metric system ( http://www.space.com/missionlaunches/launches/orbiter_errorupd_093099.htm ). “A Lockheed Martin spokesperson confirmed that their engineers had been sending data in English units. When asked whether the company was aware that NASA had been expecting metric units, the spokesperson said, ‘Obviously not.’”

    Alas, we have our own regulatory standards for just about everything which are inefficient, duplicative and just plain loose. The US is the only country on earth which didn’t standardize on GSM based digital cell phone technology. Why? (Hint: Qualcomm lobbyists)

  • avatar
    JJ

    They just are aware that US consumers are among the most demanding in the world.

    Yet they’ve put up with the crappy products that GM, Chrysler and sometimes Ford were selling them for decades.

  • avatar

    @John Horner: Actually, Europe has long been the world’s largest car market. Europe as a whole is estimated to be good for 21 million units in 2008. That number was from October and J.D.Power, it might be a bit less when the year ends. The US is projected to be 10million (worst) to 12 million (best case) The reason why one doesn’t hear these numbers is that “Europe” officially isn’t counted as a market, despite the fact that the EU started as a common market. Thank the statisticians that Europe officially doesn’t exist.

    If the US goes to 10 million units, China might overtake the US soon. Their goal for this year was 10, they won’t make it. But their market is growing, not contracting.

  • avatar
    Martin Schwoerer

    I agree with Bertel that Europe, Japan and China are getting closer in terms of norms and regulatory regimes, and that the U.S. might be well advised to join the club. It would save Ford a ton of money — Mulally having said the US models will be more similar to the Eurofords in the future. (And about GM we don’t want to talk right now).

    BTW, TTAC wrote about Europe being the largest car market back in 2007:
    http://www.thetruthaboutcars.com/german-carmakers-uber-alles/

  • avatar
    Edward Niedermeyer

    Fascinating. I find it strange that anti-regulation reformers in this country whine about CAFE and emissions standards, but never suggest reforming American crash test standards. Obviously the “won’t someone think of the children” contingent is strong in this country, but as our industry struggles to recover I personally believe that harmonizing our crash test standards with Europe (et al) could do wonders.

    Wasn’t a generation of beautiful European imports uglified with giant rubber bumpers enough to prove that we were on the wrong track?

  • avatar

    Re: the size of the market…I suppose it depends on how you define the market. Could we combine Mexico and Canada with the US to define the North American market as the NAFTA zone?

    @JJ:

    OK, let’s take an obviously crappy American car such as a Sebring and then a Chinese vehicle such as a Brillian BS6. Which one would you rather have your family driving around in? Which one is more likely to have parts fall off and leave you stranded? I think we both know the answers to those questions.

    Yes, the Sebring is crappy and ugly – but it’s all relative (at least the crappiness part) to some otherwise excellent competition. Chrysler’s failure with the Sebring was benchmarking it to prior-generation Chevys and Fords, rather than next-generation Mazdas and Hondas.

    Further, I think it could be argued that since the domestics’ market share has gone from 100% to 46% at last count, American consumers have not really been putting up with substandard products. Different consumers just have different tolerance levels for garbage, or are willing (as I was this past year) to give a domestic brand another chance after owning a Honda, Nissan, and Toyota.

  • avatar
    pf21

    Autobloggreen mentioned that an IIHS comparable testing facility had been built in China. A hybrid sedan (not from BYD)got a 4 star rating(IIHS equivalent?)in the 40 mph offset test. It seems that a couple of Chinese companies are trying to break into the electric vehicle market in the U.S. By the way, China announced in August that they had started building a national electric grid for EV charging stations. Judging by the speed at which Chinese build things, I suspect in 3 years half of the passenger cars in Beijing will be fully electric.

  • avatar
    dean

    I’d like to see uniform vehicle standards, but it isn’t likely to happen. That is because they are what is euphemistically known as a non-tariff trade barrier, and serve as a great way to keep competition to a minimum without resorting to excessive tariffs.

    Why do you think Detroit likes the status quo? It keeps all the smaller Euro players out of the U.S. because the cost of designing vehicles to meet a foreign standard is too excessive. Do you really think that GM or Ford wants to see a bunch of Fiats, Renaults, Peugeots and whatever else competing with them in the sub- and compact market?


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