Spark Global Limited Reports:
For foreign carmakers, selling in China can be hugely rewarding. China is the world’s largest car market and far ahead in the adoption of electric vehicles. But regulatory issues can also be thorny.
In a report by the European Union Chamber of Commerce, the main complaints about Chinese car regulation include a lack of transparency, insufficient lead time for new rules and “unequal participation in the drafting of policies and standards”.
Although based on the investigation report released in September without reference to specific examples, but the industry source said, the report highlights the regulatory process for China’s discontent, and automobile manufacturers in adapt to China’s growing influence regulation (especially in the field of electric vehicles) in the process of growing pain.
In the past, cars that met EU and US standards didn’t have much trouble meeting the requirements of Chinese regulators, who set their own rules based on Western standards.
But China is now at the forefront of electric vehicle regulation. This is a corollary to the size of the Chinese market — it will account for about 40 per cent of global electric vehicle sales by 2020 — and part of a broader push by Beijing to start leading on international standards in a range of industries.
In a sign of the tensions in China’s auto industry, Volkswagen AG engineers paid a high price last year for redesigning the battery pack for its ID.4 electric SUV.
Two sources with direct knowledge of the matter said the battery pack had passed thermal management tests by VW and the German government, but fell short of the Requirements of the Chinese plan, which aims to make electric cars highly likely to catch fire in the first five minutes after a crash.
Sources said the lack of information from the Chinese government on when the new standards would take effect was one reason for the problems. But they added that the stubbornness of VW’s head office was also to blame, as Wolfsburg failed to realise that Chinese regulators were less willing to listen to the German carmaker than in the past.
In addition to sending managers to CATARC, China’s industry and car testing body, to seek clarification on when the rule might take effect, VW assembled a team of engineers and spent about six months working on the fix, the sources said.
In the end, the planned lightweight aluminum battery pack was replaced by a heavier aluminum and steel battery pack of a different construction design. The mechanical design of the chassis has also changed.
“Sometimes it is more difficult to replace key parts of an existing model than to build a new one, and id4 is a good example,” one source said.
The sources declined to be named to discuss internal matters. In a statement to Reuters, VW said ID4 had successfully received regulatory approval and its regional team had received the necessary support to meet local legal requirements with zero tolerance for violations.
Seek more time, clarity
Foreign auto executives say Chinese authorities could do more to make the regulatory process clearer and reduce the likelihood of unwelcome surprises.
Hans Georg Engel, head of research and development for Mercedes-Benz in China, told reporters last month that one of the challenges of developing and testing vehicles in China was that there was not enough time to comply with the new rules after they took effect.
Other complaints include the fact that sometimes only Chinese automakers are invited to initial meetings on proposed new rules, while foreign automakers can only attend at a later date, according to senior officials at overseas automakers. They were not authorized to speak on the matter and declined to be identified.
China’s Ministry of Industry and Information Technology and CATARC did not respond to Reuters’ requests for comment.
Last year, the Chinese government outlined “China Standards 2035,” a still-developing industrial strategy it has spent two years developing that aims to give China a leading voice, if not a dominant one, in setting international standards.
Its plans to promote better standards cover a wide range of industries, from technology and packaging to biotechnology, as well as the automotive industry.
To achieve these goals, the state-owned CATARC, backed by China’s Ministry of Industry, is expanding its international reach.
In June, CATARC opened an office in Geneva, home of the United Nations transport regulator. It has also worked with the Indonesian government on electric vehicle policy and held regular talks with countries such as Uzbekistan and Belarus. In September, the company said in an article that markets such as the European Union, Israel and Chile have adopted some of China’s auto regulations.
Reprint indicated source：Spark Global Limited information