Page 164 - 2020 White Paper on the Business Environment in China
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0 White Paper on the Business Environment in China
Vehicle Emission Standards that sell 55 brands of vehicles, both Chinese and
overseas made, held a similar estimate. Another
Several provincial-level regions started major source of their pessimism is the adoption
implementing the “China VI” vehicle emission of the stricter China VI emissions standards in
standards ahead of schedule to ramp up efforts some 18 provinces and municipalities starting
against a major source of air pollution. Sales and from July 2019, one year earlier than the national
registrations of new vehicles in regions including plan. When the new standards are put in place,
Beijing, Shanghai, Tianjin, Hebei Province and models built in accordance with China V standards
Guangdong Province now have to comply with will not be allowed to be registered. This has
what is believed to be one of the world’s strictest prompted potential customers to adopt a wait-
rules on automobile pollutants. In Beijing, all and-see attitude as there are only a few models
new buses and other heavy-duty diesel vehicles in line with the new standards, thus prompting
shall follow the new emission rules, while all dealers to offer discounts, further hurting their
new vehicles are expected to follow suit starting profits. As dealers fight against the clock to cut
January 1, 2020. All existing vehicles on the their inventories, some carmakers are forcing
roads are obliged to meet the previous “China them to take on models produced with the old
V” emission standards. According to official standards instead of new ones. To make matters
data, emissions from some 6.2 million vehicles worse, auto dealers in those regions will not have
were responsible for 45 percent of Beijing’s adequate supplies of the new-standard models
concentration of small, breathable particles soon enough, as many carmakers, especially
known as PM2.5, a key indicator of air pollution. Chinese ones, have not been well prepared for the
Compared with the “National V” standards, the transition (Li, New Emissions).
new rules demand substantially fewer pollutants
such as nitrogen oxides and particulate matters International Brands
and introduce limits on particulate number
and ammonia. The new emission standards China will scrap foreign ownership limits on
were initially set to take effect nationwide from local auto firms by 2022, boosting companies
July 1, 2020. A three-year action plan on air such as Tesla which may wish to have a wholly-
pollution control released in 2018 urged early owned subsidiary in the world’s largest auto
implementation in major heavily-polluted areas, market. Currently, foreign carmakers are required
the Pearl River Delta region, Sichuan Province to set up a joint venture with a local firm in which
and Chongqing Municipality. Automakers there’s a 50 percent investment cap. China threw
and the market have been preparing for the out the limits on companies making fully electric
tougher rules. Manufacturers have completed and plug-in hybrid vehicles in 2018, plans to
the development of most “China VI” models and further deregulate commercial vehicle makers in
have entered the stage of mass production and 2020, and lift restrictions on the wider passenger
sales. By mid 2019, 99 light vehicle makers had vehicle market by 2022. Analysts believe new
unveiled environmental protection information energy carmakers that wish to expand in China
of 2,144 new models and 60 heavy-duty vehicle will benefit from the relaxation. Until 2019, the
manufacturers unveiled information on 896 green growth of traditional carmakers has been pretty
models. Chinese authorities have announced stable under the mixed ownership model, and
that the tax exemptions on NEV purchases will it will still be some time before a wholly-owned
continue through 2020 to boost the country’s foreign auto manufacturer is set up in China
green development and retain a strong domestic regardless of the implementation time frame
market (Xinhua, Tougher Vehicle Emission). by the government. Nearly all the major global
brands have set up their joint-ventures with
Chinese partners and it will be unreasonable for
China’s auto dealers are likely to face more them to add many new production lines in the
pressure in 2020 because of weaker demand market. General Motors said it would continue to
compounded by the earlier-than-expected work with existing Chinese partners to provide
adoption of tougher emissions standards in some products and services to mainland consumers,
regions. Almost half of some 1,000 dealerships
164
Vehicle Emission Standards that sell 55 brands of vehicles, both Chinese and
overseas made, held a similar estimate. Another
Several provincial-level regions started major source of their pessimism is the adoption
implementing the “China VI” vehicle emission of the stricter China VI emissions standards in
standards ahead of schedule to ramp up efforts some 18 provinces and municipalities starting
against a major source of air pollution. Sales and from July 2019, one year earlier than the national
registrations of new vehicles in regions including plan. When the new standards are put in place,
Beijing, Shanghai, Tianjin, Hebei Province and models built in accordance with China V standards
Guangdong Province now have to comply with will not be allowed to be registered. This has
what is believed to be one of the world’s strictest prompted potential customers to adopt a wait-
rules on automobile pollutants. In Beijing, all and-see attitude as there are only a few models
new buses and other heavy-duty diesel vehicles in line with the new standards, thus prompting
shall follow the new emission rules, while all dealers to offer discounts, further hurting their
new vehicles are expected to follow suit starting profits. As dealers fight against the clock to cut
January 1, 2020. All existing vehicles on the their inventories, some carmakers are forcing
roads are obliged to meet the previous “China them to take on models produced with the old
V” emission standards. According to official standards instead of new ones. To make matters
data, emissions from some 6.2 million vehicles worse, auto dealers in those regions will not have
were responsible for 45 percent of Beijing’s adequate supplies of the new-standard models
concentration of small, breathable particles soon enough, as many carmakers, especially
known as PM2.5, a key indicator of air pollution. Chinese ones, have not been well prepared for the
Compared with the “National V” standards, the transition (Li, New Emissions).
new rules demand substantially fewer pollutants
such as nitrogen oxides and particulate matters International Brands
and introduce limits on particulate number
and ammonia. The new emission standards China will scrap foreign ownership limits on
were initially set to take effect nationwide from local auto firms by 2022, boosting companies
July 1, 2020. A three-year action plan on air such as Tesla which may wish to have a wholly-
pollution control released in 2018 urged early owned subsidiary in the world’s largest auto
implementation in major heavily-polluted areas, market. Currently, foreign carmakers are required
the Pearl River Delta region, Sichuan Province to set up a joint venture with a local firm in which
and Chongqing Municipality. Automakers there’s a 50 percent investment cap. China threw
and the market have been preparing for the out the limits on companies making fully electric
tougher rules. Manufacturers have completed and plug-in hybrid vehicles in 2018, plans to
the development of most “China VI” models and further deregulate commercial vehicle makers in
have entered the stage of mass production and 2020, and lift restrictions on the wider passenger
sales. By mid 2019, 99 light vehicle makers had vehicle market by 2022. Analysts believe new
unveiled environmental protection information energy carmakers that wish to expand in China
of 2,144 new models and 60 heavy-duty vehicle will benefit from the relaxation. Until 2019, the
manufacturers unveiled information on 896 green growth of traditional carmakers has been pretty
models. Chinese authorities have announced stable under the mixed ownership model, and
that the tax exemptions on NEV purchases will it will still be some time before a wholly-owned
continue through 2020 to boost the country’s foreign auto manufacturer is set up in China
green development and retain a strong domestic regardless of the implementation time frame
market (Xinhua, Tougher Vehicle Emission). by the government. Nearly all the major global
brands have set up their joint-ventures with
Chinese partners and it will be unreasonable for
China’s auto dealers are likely to face more them to add many new production lines in the
pressure in 2020 because of weaker demand market. General Motors said it would continue to
compounded by the earlier-than-expected work with existing Chinese partners to provide
adoption of tougher emissions standards in some products and services to mainland consumers,
regions. Almost half of some 1,000 dealerships
164
