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Duties on US-made cars will not have big effect: analysts

By Li Xiaoshu (Global Times)

08:28, December 16, 2011

China's new punitive duties on imports of some US-made cars started to take effect on Thursday, but they will have a modest impact, global automakers and industry observers said.

The move is likely to stoke tensions between the two nations, Jia Xinguang, chief analyst with China National Automotive Industry Consulting and Developing Corp, told the Global Times on Thursday.

"It may put pressure on job growth in the US auto industry by weakening overseas competitive power in the long term," said Jia. He predicted the affected automakers may hasten plans to localize their output in China.

Cui Dongshu, deputy secretary-general of the China Passenger Car Association, said the move signals China's growing ambitions for its own auto industry, which has been struggling to expand.

"The duties will make US-made cars even more expensive in China. The existing taxes already add more than 25 percent to an imported vehicle's cost," Cui told the Global Times.

"But the impact on higher-end cars will be softened by a lack of price sensitivity among wealthy Chinese," he said.

Automakers said they wouldn't be substantially affected, partly because many of the cars they sell in China are produced domestically through joint ventures.

General Motors Co produces cars in China in partnership with Shanghai Automotive Industry Corporation. The cars it exports to China account for less than 0.5 percent of its production in the US.

Mercedes-Benz "doesn't anticipate big challenges," Mao Jingbo, marketing director of Mercedes-Benz China, told the Global Times. The company currently exports its M-, R- and GL-Class SUVs from the US and last year shipped more than 16,400 of them to China, roughly 11 percent of its total 2010 sales in China.

For Chrysler Group LLC, less than 10 percent of the vehicles the company sells in China would be affected, Jiang Qiong, a Chrysler China PR officer, told the Global Times.

The Ministry of Commerce announced Wednesday that it would impose anti-dumping tariffs on US-made sedans and sports utility vehicles with engine capacities above 2.5 liters.

US automakers have received government subsidies for cars bound for the Chinese market, which has harmed China's auto industry, said Shen Danyang, spokesman for the Ministry of Commerce, at a press conference on Thursday.

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Leave your comment4 comments

  1. Name

PD User at 2011-12-18123.150.183.*
ban more
LevelField at 2011-12-1860.48.98.*
I think this is the ripe time for China to do so, i don't find any wrong in the implementation of new duties on certain imported vehicles because this practice is adopted by many other nations. Moreover, China is just trying to practice anti dumping laws as what other had done to China.
PD User at 2011-12-18113.231.241.*
Sounds like a great idea. Why not ban all American products and America can ban all Chinese products. It will be the ultimate trade war
Jimbo at 2011-12-1897.115.244.*
Why not just ban and American cars and trucks for the good of the Motherland.

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