Automotive News   |   Automotive News Europe   |   Autoweek   |   Automobilwoche

Automotive News China Newsletter
Register our free newsletter, sent each Monday and Thursday

     Automakers   Suppliers   Auto Show   Comment   Car Cutaway   Newsletters   Press Releases   Register for Newsletter
  Contact Us:   Editorial   Advertising   Subscription Information   |   About Us   Media Kit
Home >> Gov't Regulation Email this story   Print this story
China greenlights tougher auto investment rules
Reuters | 2018/12/21

SHANGHAI -- China's state planner approved tougher new regulations on investment in the auto industry, a draft of which spooked automakers earlier this year, as it tightens the screws on companies adding manufacturing capacity.

The National Development and Reform Commission also said it would ban the establishment of new independent enterprises that make only traditional combustion engines, amid the country's wider push toward new-energy vehicles.

The new rules, which take effect Jan. 10, are part of a drive by Beijing to trim excess capacity in the sector, even as the world's largest auto market grapples with a protracted slowdown.

A draft of the policy released earlier this year alarmed some foreign carmakers, who worried Beijing was trying to trigger consolidation of the country's flabby auto industry through mergers and strategic cooperation.

The regulation puts the tightest restrictions on new capacity in traditional combustion engine cars, but also adds hurdles for companies investing in electric vehicles.

It could, however, open the door to new plant approvals for NEV makers, which have, in effect, been suspended since the middle of last year when the last approval was granted.

The NDRC said it would "strictly control" any new production capacity of new fuel vehicles and "explicitly ban" new investment projects for combustion engine vehicles. With NEVs it would promote the sector's orderly development.

China's car market is facing its first year of negative sales growth in decades, dragged by weaker consumer sentiment, a slowing economy and a biting trade war with the United States.

The country's main auto industry body, the China Association of Automobile Manufacturers, has forecast vehicle sales will be flat in 2019 after a decline this year. It sees tough conditions pushing weaker players out of the market. 

Related Stories
  • China to support hydrogen, fuel cell vehicles
  •     --Published:2019/26/4
  • Carmakers look to Beijing to revive market
  •     --Published:2019/19/4
  • China mulls easing controls over new-vehicle licenses to spur sales, report says
  •     --Published:2019/19/4
  • China to reduce intervention in auto, other industries
  •     --Published:2019/26/3
  • China's plan to boost vehicle sales draws criticism
  •     --Published:2019/1/2
  • Beijing mulls policies to encourage auto purchases in rural China
  •     --Published:2019/11/1
  • EV startups, glut prod Beijing to dial back on new plants
  •     --Published:2018/21/12
  • Senior China official urges shift to fuel cell vehicles
  •     --Published:2018/18/12
  • China prepared to revise technology plan
  •     --Published:2018/14/12
  • Why foreign automakers in China feel no pressure to develop EVs
  •     --Published:2018/23/11
  • The man behind China's EV vision
  •     --Published:2018/28/9
  • Beijing allocates more roads for autonomous vehicle tests
  •     --Published:2018/21/9
  • China to curb 'haphazard and redundant' auto investment
  •     --Published:2018/4/9

    Our Newsletter Editions
    Automotive News China produces two email newsletters each week. You can sort your news by the articles highlighted in each of our newsletters here.

    Select your newsletter     


    Automotive News China
    Room 1303, Building 2, Lane 99, South Hongcao Road,
    Shanghai 200233
    Telephone: 86-139-1851-5816
    Fax: 86-21-6495-0895
    Home | Help Center | About Us | Privacy Policy | RSS
    Entire contents © Crain Communications, Inc.
    Use of editorial content without permission is strictly prohibited. All Rights Reserved.