More domestic brand cars for govt officials
- Source: Global Times
- [08:17 December 31 2009]
- Comments
The total value of official-car purchase is 8 percent of the total value of car sales in China, and governments at all levels have shown an increase of more than 20 percent in car purchases, according to CBN.
Domestic car manufactures welcomed the new regulations, saying they will be given a boost by the change.
"It will bring us an enormous opportunity in the near future, since the government's initiative will definitely build consumers' confidence and promote the expansion of the market," hailed Yang Bo, general manager of the department of Rich, Cherry's recent mini, multi-purpose vehicle.
Supporting domestic brands is the government's long-term policy. The decision came on the heels of an announcement by the Government Office Administration in June that central and local government departments would increase the purchase of China-made cars further to cut the official vehicle expenses of government organs.
The announcement pointed out that these organs have taken a lead in using energy-saving and environmentally friendly domestic cars over the years and the number has topped more than 1,000 involving brands such as Cherry, Brilliance and Besturn.
Of the 38 manufacturers on the government purchase list made public in June, 21 are domestic, such as Roewe, MG and BYD.
However, an increase in the number of purchases of domestic brands could be bad news for a number of joint ventures such as FAW Toyota Motor and Changan FORD Automobile Corporation, whose higher-end car prices will be, on average, above the bar.
"We will have to bear the loss at some degree, since the nation decided to foster the development of China's own brands," Ma Chunping, a media relations officer at FAW Toyota Motor Sales, told the Global Times.
But she was confident about the company's Toyota Crown, a brand that ranks second in the official-car market after Audi.
For companies with a focus on private car sales, the impact appeared not to be serious.
Zhang Xiaojun, the executive vice president of Audi, told the Global Times there will not be much impact on Audi, as it cares about both governmental purchasing and the individual sector.
