China withdraws support for foreign investments in the auto industry in 2012

Posted on Tuesday, 3 January 2012 , 05:01:27 byLucia

Filed under china-car-supportcar-plants-chinalmc-automotiveChinaTechnology

China withdraws support for foreign investments in the auto industry in 2012

Considered to be the world's most populous country as related to car plants, China is not going to encourage the carmakers to invest in the auto industry this year. This intention puts an end to seven years of numerous benefits, including reduced tariffs on imported equipments. The move is due to come into effect on January 30, 2012 and the joint announcement was made by China's National Reform and Development Commission. The official press agency of the government of the People's Republic of China is represented by Xinhua, who stated that the decision was taken on the basis of the strong need of a healthy development of domestic auto making. However, Xinhua added that the government was going to open more sectors to foreign investors and encourage at the same time investment into energy-saving, environmentally-friendly technologies, biotechnology, alternative energy, advanced materials and alternative-fuel cars. U.S.-made cars that are imported into the country have recently received new duties from China. Furthermore, Jenny Gu, the senior market analyst at LMC Automotive in Shanghai, stated to Bloomberg news that it would be quite difficult for car manufacturers to obtain approval for new plants in the future if they did not present an investment in new-energy vehicles. The China Association of Automobile Manufacturers announced that in the first eleven months of 2011, the vehicle sales in China faced a 2.6 percent growth as compared to the same period of 2010, with passenger car sales increasing by 5.3 percent to 13.1 million units.