Chinese Environment Ministry's Rejection of BMW Factory Expansion Generates Concern Among Foreign Brands
The Chinese Ministry of Environmental Protection’s rejection of BMW’s application to expand one of their factories is generating concern that global automaker will find it harder to win approval for their own Chinese projects.
According to Bloomberg, he ministry posted a statement on its website Tuesday saying that it did not approve BMW Brilliance Automotive’s plans for the third phase of the factory that are building in the northeastern city of Shenyang, citing inadequate wastewater analysis and the plan’s failure to meet government anti-pollution targets. The ministry also said that the first phase of the plant has still not passed an inspection.
While analysts say that this is the first time they can recall such a rejection of an expansion of an already approved project, BMW is acting as though it is a routine bureaucratic matter.
The rejection comes as domestic Chinese auto industry officials have been calling for the government to investigate imported car prices. An executive of the China Automobile Dealers Association said that profits from selling imported luxury cars in China is 30% higher than the world average.
"the ministry asked for additional documents" Sure, in the form of yuan notes.
Every foreign company in China should be worried. The Chinese government is well known for hostile behavior towards successful foreign brands. Just ask Apple and Google.
This is good news for a lot of reasons - none of which BMW really wants to hear. Now, that said I would imagine China is not doing this so much for the benefit of a cleaner environment but in order to support domestic manufacturing. Many times I've questioned how long it would be before China is forced by its own citizens to clean up the environment, and what the cost to foreign manufacturers would be as a result. How long before the competitive advantage to manufacturing in China declines?
Ask Toyota or BP, they have lots of experience. http://www.bloomberg.com//news/2013-07-24/louisiana-levee-group-sues-oil-companies-over-wetlands-1-.html Southeastern US now views BP as the ATM.