Foreign manufacturers importing bulk-assembled vehicles in China will be deterred
Recently, the two-day “Consultation Consultation Meeting on the Management of the Characteristics of the Import of Auto Parts and Components†concluded in Chongqing. The General Assembly adopted the "Management Measures for the Import of Auto Parts" for the draft of the draft. The "Measures" is scheduled to be implemented on January 1 next year. This means that foreign manufacturers who import parts in China to assembly cars will be stopped.
"Car policy" first supporting policy
The "Measures" is the first supporting policy for the "Automotive Industry Development Policy" implemented from June 1st, which is led by the General Administration of Customs. On August 18, the opinion meeting held in Handan mainly listened to the opinions of the national auto parts importers.
A total of 16 participating companies participated in the domestic auto industry's “big names†FAW, SAIC, Dongfeng, Chang'an and its joint ventures. The leaders of the four ministries and commissions of the National Development and Reform Commission, the General Administration of Customs, the Ministry of Commerce, and the Ministry of Finance were also present at the meeting, as well as the head of the customs department of China's eight largest automobile production bases.
"Big Pieces" Import Taxes by Vehicle
The "Measures" stipulates that if the imported parts constitute the characteristics of the vehicle, the tariff will be imposed on the vehicle in the future. In this way, the profit rate of companies that use the imported spare parts to assemble vehicles will drop significantly. Because there is a 25-percent difference in the tariffs on entire vehicles and parts, even if the tariffs for whole vehicles are lowered next year, the gap is still about 20%.
Which parts have the characteristics of the vehicle? The "Measures" identify the body (including cab) assembly, engine assembly, transmission assembly, drive axle assembly, non-drive axle assembly, frame assembly, steering system, brake system, etc. The "Measures" also stipulates that any imported key piece that meets or exceeds the prescribed quantity (initial positioning 60%) shall be regarded as constituting the characteristics of the assembly.
New policy to curb imported assembly vehicles
Our country has always been a technology-for-market for foreign automakers, but practice has proven that this idea has not worked. The market was occupied by foreign automakers, but the technology did not bring it to China. The key lies in the foreign automakers drilling the loopholes in the auto import policy: the parts tariff is much lower than the vehicle. Foreign manufacturers have imported the entire vehicle to China after being removed from the country. The “6+3†automobile industry pattern indicates that the Chinese automobile industry is becoming the “appendage†of the international auto giants.
People in the industry believe that the formulation of the "Measures" actually shows that the country will curb the assembly of parts and components at the source, forcing foreign manufacturers to import the technology into China, thereby nurturing the domestic automobile industry.