By on December 18, 2018

Despite spending a fortune supporting burgeoning automotive manufacturers and opening its door to foreign enterprises, China’s state planner has approved strict new regulations on investments within the industry.

Following a handful of draft proposals earlier this year, China’s National Development and Reform Commission (NDRC) announced it will ban new independent businesses that make only traditional combustion engines while continuing to push for more “new energy” vehicles.

The People’s Republic has what some might call a bit of a pollution problem. But it’s also one of the largest and fastest-growing battery producers in the world; state policy aims for the widespread adoption of electric vehicles. Unfortunately, this left China with hundreds of automotive startups that will never become profitable just as the country enters an economic downturn and its first year of negative car-sale growth in decades.

The NDRC’s decision is likely intended to help amalgamate the country’s overgrown and fractured auto sector while simultaneously making it harder for foreign businesses to move in after China “opened up” its market earlier this year. According to Reuters, the new rules should come into effect on January 10th.

From Reuters:

A draft of the policy released earlier this year alarmed some foreign carmakers, who worried Beijing was trying to trigger consolidation of the country’s flabby auto industry through mergers and strategic cooperation.

The regulation puts the tightest restrictions on new capacity in traditional combustion engine cars, but also adds hurdles for companies investing in electric vehicles.

It could, however, open the door to new plant approvals for [new energy vehicle] makers, which have, in effect, been suspended since the middle of last year when the last approval was granted.

The China Association of Automobile Manufacturers (CAAM) predicts flat vehicle sales through 2019 — though some foreign analysts expect a drop akin to what we’ve seen this year. Regardless, CAAM believes the NDRC’s new regulations will help cull the more feeble auto businesses that were allowed to proliferate.

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23 Comments on “China Readies Rigid Auto Investment Rules for 2019...”


  • avatar
    PandaBear

    So, Tesla only huh?

  • avatar
    JoDa

    Tesla should move to China. It’s the only place they could ever make a profit.

  • avatar

    JoDa what do you know about Tesla to make such a clueless suggestion?

  • avatar
    highdesertcat

    And I am still a proponent of importing into the US cheap Made-In-China disposable cars that peeps can afford as their DDs.

    A long time ago it started with the VW bug. Then the Japanese cheapie imports followed. And after that it was the el cheapo South Korean- made cars.

    There’s no reason why we in America cannot import cheap EV and ICE cars from China, and apply the same tariffs to these Chinese-made cars that the Chinese apply to American-made cars imported into China.

    There aren’t any affordable cars sold in the US any longer. And Base models are few and far between because the automakers lose money on every one they make.

    • 0 avatar
      Art Vandelay

      I was under the impression most would not be so cheap after they were reengineered to conform to US safety and pollution standards.

      • 0 avatar
        highdesertcat

        Parts and labor have got to be cheaper in China than the US. It was that way with the VW Bug, The Japanese Cheapies and the South Korean El Cheapos. That’s why they undercut the US-made cars.

        If the UAW and Ford and GM didn’t have such an active Lobby in Congress, I bet we could import less expensive cars without all the political drama.

        I spend quite a bit of time outside of the US, and wherever I go they seem to do just fine with less expensive cars for the masses. That is something that we lack in the US – inexpensive cars.

      • 0 avatar
        Matt Posky

        One would think, Art.

    • 0 avatar
      Art Vandelay

      Also you can get a versa for 12,100 bucks with plenty of models well under 15k.

      • 0 avatar
        highdesertcat

        And how many are available at a dealer near you?

        • 0 avatar
          Art Vandelay

          3 within 12 miles Admittedly they were 800 more, but had AC. You can get the auto for under 15k. Plenty of other models (Fiesta, Accent, etc) there. So for 12,900 you get a 5 speed, bluetooth, power steering, airbags and AC. From a basic appliance that ain’t bad. My old Saturn SL was right at 9,000 1992 bucks. It had Manual steering, no pass. side mirror, AC, AM/FM only stereo, and no airbags (passive restraints were automatic seat belts). 3k extra bucks with the extra content and safety 26 years later seems like a decent deal. The Saturn had 84hp, and ran 0-60 in like 11 seconds. The Versa does it in 9.2 and has painted bumpers. If we harken back to 1992, the Versa is performance wise right there with a Civic SI. We live in a golden era

          • 0 avatar
            highdesertcat

            Where do you live?

            I bought my daughter a new $12K 1996 Saturn but we had to travel 120 miles to get to the nearest dealer in El Paso, TX.

            And with people in my area doing a daily commute of 150 mi roundtrip or more, they wear out cars pretty fast.

          • 0 avatar
            Art Vandelay

            Huntsville, AL

          • 0 avatar
            Art Vandelay

            My Fiesta ST was just under 17k, but that was with 5k on the hood last july when Ford was blowing them out. The rebates applied to all trims however so you could have probably scored a decently equipped one for 12 or so. Honestly if they had still made the ecoboost 3 model I would have considered that, a suspension upgrade (Believe Ford sells what is essentially the ST suspension aftermarket) and a mild Cobb tune. I am a slow car fast fan and that is a car id have to flog everywhere. What I really need is like a 20,000 mile B-13 SE-R to pop up on Bring a Trailer though.

          • 0 avatar
            highdesertcat

            Huntsville! I’ve been there many times between 1980-2012.

            My youngest brother lived on Magna Carta before he and his wife moved to her parental home in Manhattan, NYC, NY.

            Her parents moved to Santa Fe, NM, when her dad retired from the financial district.

    • 0 avatar
      PandaBear

      You have no idea. US’s car affordability is the best in the world. Even homeless can afford one. In Other nations only upper middle class and above can.

      • 0 avatar
        highdesertcat

        This is what people tell me who wear out cars at the rate of 1000+ miles per week commuting to/from their jobs to where they live.

        One guy I know works for the Border Patrol and commutes to the Sector office in El Paso daily, that’s at least 200+ miles roundtrip. Once he gets there he can get a CBP car to go where he needs to go out in the field.

        He was buying used for awhile but needed to keep three of these commuters on hand so he would always have wheels because one was always in the shop.

        Now he buys new, and whatever is cheapest.

  • avatar
    jalop1991

    “The People’s Republic has what some might call a bit of a pollution problem. But it’s also one of the largest and fastest-growing battery producers in the world”

    No kidding. When you have zero constraints on working with the toxic materials that make up batteries (not to mention labor is free and expendable and replaceable), and to that you add the backing of the state to acquire said materials, what else do you expect to happen.

    “China Readies Rigid Auto Investment Rules for 2019”

    Every man wants a Ridgid tool.

    • 0 avatar
      Lorenzo

      There’s way more pollution in China than can be attributed to cars. Mills churning out steel and cement are huge polluters, along with many electrical/electronics factories and chemical plants, along with huge soft coal consumption to provide electricity. Electric cars won’t help.

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