The auto industry and auto exports have top billing in China’s current 5 Year Plan. (Yes, for sentimental reasons, they still have one of those.) Yet when it comes to the car export part, China is still light-years away from fulfilling their master plan. The Vice Director General of the Department of Mechanic, Electronic and Hi-Tech Industry, Ministry of Commerce, made the startling admission. “China’s auto exports are still in the early stage, leaving a large gap in global exports,” Zhou Shijie told Xinhua. Translation: China’s auto exports are in the doghouse of the export powerhouse. “It is difficult for export companies to master the vehicle entry policy in foreign countries.” Translation: Our cars failed miserably in crash tests, we have trouble with pesky U.S. FMVSS and European ECE regulations, which we can barely comprehend (let alone satisfy). We’re fed up and we’re not gonna take it. No, we’re not gonna take it. Uh-oh.
Only fools with think that China will throw in the towel on car exports. Especially not while Western auto makers have trouble staying alive. Mr. Zhou didn’t say that, but it goes without saying. (Although I just said it.) The market weaknesses may be China’s grand opening. Zhou announced that “China’s Ministry of Commerce will take nine measures to support domestic auto companies to enlarge auto exports.” He didn’t elaborate what those measures may be, but it’s a fair assumption that more attention will be given to crash tests, while whole car companies crash in Western markets. And there will be eight measures more. When the auto industry upturn turns up, China’s automotive exports will be back, with a vengeance.
But wait, there’s more: At the same conference where Zhou admitted defeat, Ivan Hodac, Secretary-General of the European Automobile Manufacturers Association (ACEA), said that the European Union expects China to relax. Namely China’s insistence on 50:50 joint ventures for auto makers. They should also relax their CCC regulations, a Chinese addition to the FMVSS/ECE alphabet soup, and widely seen as Chinese water torture to drive foreign importers to tears. Xinhua quotes a faceless “industry expert” who calls Ivan’s demands “excessive.” But there might be a deal in the works.