Editor/Reporter - CheersandGears.com
December 29, 2011
2012 is bring forth some significant changes for automakers that were planning to invest in China. The National Development and Reform Commission (NRDC) and the Ministry of Commerce announced that January 30, 2012, the country will stop encouraging foreign investment in the auto industry. The NRDC states the decision was made to help nurture their domestic brands.
Jenny Gu, a senior market analyst at LMC Automotive in Shanghai tells Bloomberg the decision will end seven years of foreign-investor benefits including reduced tariffs on imported plant equipment.
Recently, China has slapped new duties on U.S.-made cars that are imported into the country.
“It might be more difficult for carmakers to get approval for new plants in the future unless they have an investment in new-energy vehicles,” Gu said.
China isn't cutting all foreign investments. In NRDC's press statement, it says the government will "open more sectors to foreign investors and encourage investment into energy-saving and environmentally-friendly technologies, new-generation information technology, biotechnology, high-end equipment manufacturing, alternative energy, advanced materials, and alternative-fuel cars."