Has GM's and Ford's Chinese Hothouse Become Cold Comfort?

has gms and fords chinese hothouse become cold comfort

The Detroit News reports that The People's Republic has a new strategy to combat air pollution: tax the shit out of large cars [paraphrasing]. "The tax on passenger vehicles with engines bigger than 4 liters will be doubled to 40 percent from 20 percent, effective Sept. 1, the Finance Ministry said Wednesday in a statement on its Web site. Those buying vehicles with engines sized from 2 liters up to 4 liters will have to pay a 25 percent tax, up from the current 15 percent, it said." So, Buick's big barges get blasted. Ditto Ford's Chinese Volvos and Lincolns. OK, so both companies sell small cars in China as well, as part of their [mandatory] joint ventures. Only just-auto [sub] reports China's new car market has hit the skids. July sales fell 17 percent. "The Chinese vehicle market has cooled this year under the combined influences of higher inflation (reducing consumers' disposable income), increased petrol prices, the effects of the Sichuan earthquake and generally lower consumer confidence (stock markets are down)." Things don't look so bad year-to-date, but the domestics' Chinese bright spot won't be shining a ray of sunshine on next quarter's financials. Beyond that, the threat of official action to tamp-down the JVs to help the home team looms large. [thanks to autoacct628 for the link]

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  • Orian Orian on Aug 14, 2008

    Suppression of rights - we've seen a lot of that in this country over the last 7 years and it continues to get worse with the current party controlling the White House. The 2007 International Privacy rankings put the good ol' USA at the same rank as China - Endemic Surveillance Societies. The worst you can get. Sure, there are other means of ranking freedom, but we no longer have it. The last country to require its citizens to sign in and out of the country like we do was Nazi Germany under Hitler. That said, GM and Ford are going to get hit hard by this. And once again they should have seen this coming well before now.

  • Lynn Ellsworth Lynn Ellsworth on Aug 14, 2008

    I almost feel sorry for the Chinese. The central planners thought with their poor roads the people needed Jeeps. So one of the first assembly plants to set up in China was for Jeep Wagoneers. Nope, the people wanted Audis, BMWs, Benzes, Buicks, and Rolls Royces. The central planners also failed completely in estimating how fast the Chinese economy was going to take off. Where I feel sorry for the Chinese is that their air in Northern China is now horrible. And if their economy had taken off 10 years later they probably would have explored hybrids, hydrogen, all electric, diesels, etc. etc. in order to avoid the pollution. China could have been a world leader in alternate transportation ideas instead of just copying and getting themselves into such a mess. I also feel sorry for us in the U.S. because some of that bad air in China reaches us.

  • M20E30 M20E30 on Aug 14, 2008

    nudave : While I do agree with your point on the racial issue(Some people dislike the Chinese simply because they are different) most non-democratic regimes are not prosperous, historically it has been the opposite no matter what idealogy they choose.

  • Capeplates Capeplates on Aug 15, 2008

    Pity they didn't introduce these measures before the Olympics - cough, cough