China Readies Rigid Auto Investment Rules for 2019

Matt Posky
by Matt Posky
china readies rigid auto investment rules for 2019

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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  • Highdesertcat Highdesertcat on Dec 18, 2018

    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.

    • See 11 previous
    • Highdesertcat Highdesertcat on Dec 19, 2018

      @PandaBear 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.

  • Jalop1991 Jalop1991 on Dec 19, 2018

    "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.

    • See 1 previous
    • JoDa JoDa on Dec 19, 2018

      @Lorenzo The Chinese people still burn coal for heat...The cars actually clean the air.

  • Jeanbaptiste Any variant of “pizza” flavored combos. I only eat these on car trips and they are just my special gut wrenching treat.
  • Nrd515 Usually for me it's been Arby's for pretty much forever, except when the one near my house dosed me with food poisoning twice in about a year. Both times were horrible, but the second time was just so terrible it's up near the top of my medical horror stories, and I have a few of those. Obviously, I never went to that one again. I'm still pissed at Arby's for dropping Potato Cakes, and Culver's is truly better anyway. It will be Arby's fish for my "cheat day", when I eat what I want. No tartar sauce and no lettuce on mine, please. And if I get a fish and a French Dip & Swiss? Keep the Swiss, and the dip, too salty. Just the meat and the bread for me, thanks. The odds are about 25% that they will screw one or both of them up and I will have to drive through again to get replacement sandwiches. Culver's seems to get my order right many times in a row, but if I hurry and don't check my order, that's when it's screwed up and garbage to me. My best friend lives on Starbucks coffee. I don't understand coffee's appeal at all. Both my sister and I hate anything it's in. It's like green peppers, they ruin everything they touch. About the only things I hate more than coffee are most condiments, ranked from most hated to..who cares..[list=1][*]Tartar sauce. Just thinking about it makes me smell it in my head. A nod to Ranch here too. Disgusting. [/*][*]Mayo. JEEEEZUS! WTF?[/*][*]Ketchup. Sweet puke tasting sludge. On my fries? Salt. [/*][*]Mustard. Yikes. Brown, yellow, whatever, it's just awful.[/*][*]Pickles. Just ruin it from the pickle juice. No. [/*][*]Horsey, Secret, whatever sauce. Gross. [/*][*]American Cheese. American Sleeze. Any cheese, I don't want it.[/*][*]Shredded lettuce. I don't hate it, but it's warm and what's the point?[/*][*]Raw onion. Totally OK, but not something I really want. Grilled onions is a whole nother thing, I WANT those on a burger.[/*][*]Any of that "juice" that Subway and other sandwich places want to put on. NO, HELL NO! Actually, move this up to #5. [/*][/list=1]
  • SPPPP It seems like a really nice car that's just still trying to find its customer.
  • MRF 95 T-Bird I owned an 87 Thunderbird aka the second generation aero bird. It was a fine driving comfortable and very reliable car. Quite underrated compared to the GM G-body mid sized coupes since unlike them they had rack and pinion steering and struts on all four wheels plus fuel injection which GM was a bit late to the game on their mid and full sized cars. When I sold it I considered a Mark VII LSC which like many had its trouble prone air suspension deleted and replaced with coils and struts. Instead I went for a MN-12 Thunderbird.
  • SCE to AUX Somebody got the bill of material mixed up and never caught it.Maybe the stud was for a different version (like the 4xe) which might use a different fuel tank.