China to Harmonize Safety Regs With EU (US, Not So Much)
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.
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?
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.
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.
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?