Auto Industrial Policy Updates

China Ends Auto Sales Stimulus Measures

China's "autos to the countryside" and "clunkers for cash" measures, which were first announced in mid-2008 as part of the government's policy to boost auto sales amid the global economic downturn, came to an end on Dec. 31, 2010. These policies were extended twice to tackle the gloomy global economy in the years following the global financial crisis explored in 2007.

China's Ministry of Finance (MOF) also announced on Dec. 28 that the sales tax for sedans of an engine capacity of 1,600cc or smaller would be adjusted upward to the original level of 10% at the beginning of 2011. As part of the government's auto sales stimulus package, the sedan sales tax rate was once cut to 5% in mid-2008 and then raised to 7.5% in 2009.

The ending of these policies in favor of the auto market has aroused a spree of car buying in the last weeks prior to their expiration as consumers rushed to qualify for the subsidies and tax discounts.

Despite the tax cut, auto sales tax income rose considerably in 2010 thanks to the growing auto sales, according to China's official statistics. During the first 11 months of the year, auto sales tax revenue reached RMB156.918 billion, up 53.3% from the same period of the previous year. According to the Commerce of Department, China's auto production and sales during the first 11 months of 2010 both hit record highs of 16.4 million and 16.39 million units, up 33.71% and 34.05%, respectively.

Following the ending of these policies, the Beijing government is drafting another stimulus package aimed at promoting the R&D and production of energy-efficient and low-emission cars.

Australia Committed to Promoting Green Car Industry
The Australian government is seeing the fruits of a 13-year green car industry promotion policy based on the theme, "A New Car Plan for a Greener Future," announced in 2008. With funding support under the policy, GM Holden opened an upgraded car body shop at its Elizabeth plant in October 2010. The move is considered an important step in greening Australia's automobile industry by 2020.

The 13-year plan was published as a guideline for Australia's development of a green car industry that can produce internationally competitive, low-emission, and fuel-efficient vehicles in Australia.

Of the total AUD 6.2 billion budgeted for the plan, around AUD1.3 billion is earmarked for the Green Car Innovation Fund to help Australian car companies design and produce eco-friendly cars.

"The upgraded plant manufactures panels for the locally produced Holden Cruze, laying the groundwork for a whole range of green vehicle possibilities," said South Australian Deputy Premier Kevin Foley.

"We understand that times have been tough in Elizabeth and other communities that rely on a thriving car industry. The New Car Plan is securing their future by transforming Australian car-making industry so that we can capitalize on the growing demand for greener vehicles," Foley emphasized.

"The government demonstrated world class leadership to protect the Australian economy during the economic downturn. It includes the commitment of 149 million Australian dollars under the Green Car Innovation Fund to secure this body shop and enable local production of the Cruze," said Senator Kim Carr. "Local production of the Cruze is vital to creating jobs and supporting a greener auto industry in Australia," he added.

With the newly-upgraded plant, GM Holden is able to make cars adapted to alternative fuel systems like LNG, CNG, E85, as well as hybrids. The new model of Australian-built Cruze is expected to hit the market in early 2011, with a hatch variant due later in the year.

Czech to Push for Closer Auto Industrial Ties With Australia

With great potential to become an auto production center in Europe, Czech is pushing for closer ties with Australia's auto industry. Several business networking events have been proposed for Czech's car and auto parts companies to promote exports to Australia, including the proposed "Czech Technology Days" to be held in Australia.

"Trade and economic relations between the Czech Republic and Australia currently have a good dynamic, and both sides are interested in moving forward with that relationship. The automotive industry is precisely the sector where this aim could be achieved," said Milan Hovorka, Deputy Minister of Industry and Trade in Czech.

"I have reached an agreement with my Australian counterpart on the further steps which we will be taking at the government level in order to facilitate cooperation between Czech and Australian companies. I highly recommend that our subcontractors acquaint themselves with the Australian government's support programme for the automotive industry, which in my opinion offers them a whole range of interesting opportunities."

Earlier, Hovorka had a meeting with Australian envoy Steve Bracks to talk about feasible means for cooperation between the two countries for the auto industry. During that meeting, Bracks presented the Australian government's programme, dubbed "A New Car Plan for a Greener Future," as a blueprint for the development of modern materials, electric and gas-powered cars, and other advanced technology for the Australian auto industry.

EU Urged to Make CO2 Evaluation Tools
The Brussels-based European Automobile Manufacturers' Association (ACEA), a trade association of the 16 major car, van, truck and bus producers in Europe, is seeking to work with the EU policy makers to develop feasible policies measures to further reduce CO2 emissions from road (freight) transport.

"Our industry operates globally and CO2 emissions are a global challenge," said Leif Johansson, Chairman of the ACEA commercial vehicle board and President & CEO of Volvo Group. "The European commercial vehicle manufacturers are technology leaders and a driving force in the transition to sustainable mobility and transportation," he said at an annual meeting of the association's commercial vehicle board.

The board has called on the EU policy makers to ensure an integrated and supportive industrial policy, while seeking optimal synergy with the Community's transport, energy and trade policies. It also urged the EU to actively promote the global harmonization of technical standards and measurement methods, to help industry benefit from economies of scale.

"With ACEA, we are developing an evaluation tool to calculate real-life CO2 emissions from trucks and buses ahead of purchase. Our initiative marks an important step in realising the commercial vehicle industry's 'Vision 2020', announced back in 2008, pledging to further reduce CO2 emissions by 20% by the year 2020," said Johansson.

According to the ACEA, the CO2 evaluation tool will help customers to choose the most fuel-efficient vehicle specification, involving issues such as engine-gearbox combination, aerodynamic features and tire specifications. The tool will also serve to provide stakeholders-at-large with essential insight in the complexity and variety of road transport.

The ACEA-compiled statistics showing that the European commercial vehicle industry has already cut the fuel consumption of its products by more than a third since the 1970s. Pollutant emissions such as nitrogen oxides and particulate matter have already been reduced by as much as 85% and 95% respectively since the late 1980s.

Japan Raises Import Duties on Over 400 Chinese Import Items
Observing the growing economic power of China, the Japanese government recently decided to raise import duties on over 400 import items from China, including agricultural products, garments, and plastic products, among others. The decision is scheduled to take effect as soon as in April this year.

"Japan used to offer favorable import duties for the goods shipped from China and other under-developed countries. As China has gained considerable economic power and has exceeded Japan as the world's second largest economic entity, Japan will end this favor for China," said a Japanese government official.

The Japanese move is widely considered to be linked to the degenerating relations between the two countries, which are competing against each other for a leadership in the Asian economy.

Spanish Government to Provide Subsidy to Auto Industry

The Spanish government has decided to allocate a total of 466 million euros for the auto and aerospace industries to bolster R&D spending on eco-friendly cars and green manufacturing practices. The government also will budget 200 million euros for a revitalization fund for the auto industry, which has faced a very difficult time in 2008 and 2009.

In May, the government announced that it would provide subsidies to new car purchasers, in addition to a 700 million euro subsidy to replace old vehicles with energy efficient cars. This policy is credited with driving up auto sales last October by 26.4% year-over-year, to 98,202 units, according to a report by Spain's automotive industry association Anfac.

The auto is one of Spain's most important industries, contributing 3.5% to GDP in 2009 and providing 9% of the nation's jobs.

Taiwan to Launch First Batch of Intelligent EV Promotion in 2011

Taiwan unveiled its first home-designed intelligent electric vehicle (EV) last September. The Ministry of Economic Affairs (MOEA) said that the first intelligent Evs would be formally launched in the second quarter of 2011. Several companies have agreed to purchase them for their corporate fleets, including Chialease Finance Co., HTC Transportation, TNT Express, and China Steel.

The smart EV has a driving range of five kimoleters per charge and can be recharged in just 20 minutes.

Under the MOEA's 3-year EV promotion plan for 2010-2013, the government will provide NT$2.2 billion (US$733,000) in subsidies to ten EV-develoipment groups that together aim to produce 3,000 EVs by the end of 2013.