Another curb for government car consumption
0 Comment(s)
Print
E-mail Beijing Review, April 20, 2012
Yang Zhongyang (Economic Daily): For many years, the public has been unsatisfied with government departments' excessive preference for foreign cars. China's own auto brands have made great headway in recent years, and thus the voices asking government departments to use domestic cars are growing louder. The Central Government has also issued documents demanding more use of domestic cars in government departments. But the fact is that foreign cars still make up the lion's share of China's government car purchases. For example, the cars purchased in 2009-10 include joint-venture brands such as Volkswagen Jetta, Toyota Camry, General Motors Buick, and even luxury brands like Audi, BMW and Mercedes Benz. However, China's own auto brands did not benefit from the government car purchases.
It's undeniable that in recent years domestic cars have made big progress in quality, credibility and various technical indexes. According to J. D. Power's investigation into the quality of Chinese cars, although there is still a gap between Chinese domestic cars and joint-venture cars in terms of quality, the malfunction rate per 100 Chinese vehicles has dropped to the level of joint-venture cars in 2004. What is embarrassing is that although domestic cars are of the same quality, and are much cheaper than joint ventures' products for the same type, they are still not as popular as foreign branded cars. Yin Mingshan, Board Chairman of Lifan Auto in southwest China's Chongqing Municipality, once said, "In terms of quality, if foreign cars can score 100, Lifan's cars and motorbikes can score 90, but when foreign cars can sell for 1 million yuan ($150,873), ours even can't sell at 100,000 yuan ($15,873)." China's domestic auto brands are struggling very hard in fierce market competition.
Why does this happen? First, we have to admit that China's auto brands are still not competitive enough. They have low research and development capability, insufficient technology and poor brand loyalty. However, these are not the main problem. The deep-rooted reason is that most Chinese people have blind faith in foreign things, particularly for cars. Most people have such a principle, "If I buy a domestic car, even if it is a good car, it's a faceless thing. If I have enough money, I must buy a foreign car." Worse still, blind faith in foreign products not only exists among ordinary people, but also among many government officials.
What government officials do can be quite influential to the public. If officials always choose foreign cars as government cars, it's not only a waste of taxpayers' money, but more importantly, they are strengthening some people's blind faith in foreign things and weakening the public's perception of domestic brands.
No other country in the world has as many government cars as China does, and thus the government's choice of cars has a far-reaching influence on China's domestic auto industry. How to formulate a government car purchase standard suitable for China's national condition not only is testing the Central Government's wisdom, but also will affect the future development of China's auto industry.
The good news is that this new draft list, within the framework of WTO international trade rules, restricts government departments to buying domestic cars. If this policy is well implemented, it will provide rational guidance for the public in car consumption. When Chinese cars sell well, not only the Chinese consumers but also consumers in other countries will begin to like and appreciate Chinese cars.
Wang Yunqing (Guangzhou Daily): This policy is actually coming a bit late. It should have come five years ago when China's domestic auto production just started to develop. Anyway, it's better than never. China's domestic auto manufacturing was struggling very hard throughout 2011, so the new policy is undoubtedly a timely help to promote this industry. As for how much this policy can help, it depends on these auto brands' own efforts.
Dong Baoqing (Automobile): It's good for the authorities to provide guidance in government department car purchasing. This measure has been adopted by some other countries, such as the United States. Available on the list are all China's domestic brands. The only thing that worries us is that the government's policy might make some companies reluctant to make further progress in research and development. In this way, it actually is harming them in the long run.
Ding Zhaolin (www.cnr.cn/china): It's good that China's government departments are required to buy domestic cars. For so many years, the public and the media have been calling for government departments to use domestic cars, and now their calls are responded. But there are two problems that we have to take into consideration. First, we need a definition of the "domestic cars." Second, we need to ensure the new car purchase regulation is implemented.
The priority now is how to enforce the new regulation. China never lacks good ideas and objectives, but implementation is always a bit difficult. As for how to make sure domestic cars are widely used by the government, we need a strong supervisory system, including efforts not only of the government, but also of the media and the public. Without an effective supervisory system to ensure the implementation of the car purchase regulation, maybe the good objectives will never come true.
Go to Forum >>0 Comment(s)