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Government Tightens Car Export Rules
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The government yesterday tightened requirements on domestic carmakers and trading companies to qualify for car exports.

From March 1, car exporters will have to apply for an export license from the Ministry of Commerce every year.

Automakers will be required to meet domestic manufacturing standards, get the compulsory CCC quality certification and provide after-sales service abroad.

Trading companies also need to be authorized by a qualified manufacturer and committed to jointly shouldering responsibility for overseas sales.

The move is expected to restore order to China's "dynamic but disorderly" car export market, according to Zhang Ji, deputy director with the ministry's Department of Mechanics, Electronics and High-tech Industry.

Exporters will have to renew the license every year licenses will not be granted if serious quality problems are found in their products the previous year.

Zhang said the government will tighten requirements further if necessary.

Customs figures show that China exported some 293,000 vehicles in the first 11 months of last year, up 88.8 percent year-on-year. They were spread across 182 countries and regions. Developing countries in Africa and Southeast Asia topped the target markets.

Of the 1,175 car exporters last year, 669 sold less than 10 vehicles overseas and 204 sold only one.

Since not all car exporters were qualified to manufacture in China, the industry saw poor service, rampant price wars and speculation.

China's average sedan export price declined nearly 20 percent year-on-year to $6,740 in the first 11 months last year.

"The establishment of the new rules is expected to eliminate about 700 car exporters," said Zhang.

He added that it will also help to improve the average quality of the country's vehicle exports and rebuild the image of "Made-in-China" brands.

Most of the eliminated firms would be trading companies because the current standards are not strict on domestic vehicle manufacturing. The new car export regime imitates that for motorcycle exports, which was implemented last year.

Although China was the world's largest motorcycle manufacturer for 12 years and the largest exporter for five years, the unit price of exported motorcycles was dropping until the export management regime was put in place.

(China Daily January 10, 2007)

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