China’s Ministry of Commerce (MOC) has released a preliminary ruling on an anti-dumping and anti-subsidy investigation into US vehicle imports that includes saloons and SUVs from carmakers including GM, Chrysler and BMW.
When a company exports a product at a cost lower than the price it normally charges in its home market, usually with the aid of subsidies, it is said to be “dumping” the product.
The MOC launched the investigation in November 2009 following a complaint to this effect by the China Association of Automobile Manufacturers (CAAM). At the beginning of April this year the MOC found that those vehicles from US carmakers with a cylinder capacity of more than 2,500cc “have caused material injury to China’s domestic industry”, having unfairly benefitted from subsidy rates between 6.2% and 12.9%.
Under WTO rules, China’s government must be able to show that dumping is taking place, calculate how much lower the export price is compared to the exporter’s home market price, and show that the dumping is causing injury or threatening to do so, which the preliminary MOC ruling appears to have established. One course of action now open to China could be to charge extra import duty on the vehicles to bring the price closer to the “normal value” and remove the injury to its domestic industry.
So far, however, the Ministry has said it would not levy temporary anti-dumping taxes or adopt countervailing measures but invited companies affected to file written statements and evidence to it.
While BMW was unwilling to comment on the matter, a spokesman for GM’s Policy and Washington department told Automotive Logistics News that the company looked forward to discussing the preliminary finding in the coming weeks. “We wish to thank Chinese officials for the professionalism with which this investigation has been conducted and GM has complied with all requests for information in a timely manner,” he said.
Citing its long history in China and its contribution to an industry that has grown rapidly since 2009, GM pointed out that imports were still a very small share of the market.
“As China continues to evaluate the merits of the evidence collected during their investigation, we respectfully ask that they consider the possibility of a solution that can continue to promote free and open trade between our countries,” said the spokesman.
Chrysler said that given the preliminary nature of the findings it would be inappropriate to comment. Meanwhile, however, the company is also facing a halt on imports of the Jeep Wrangler to China following concerns about transmission overheating problems that have been reported to cause the vehicles to burst into flames.
The General Administration of Quality Supervision, Inspection and Quarantine in China has banned imports of the vehicle following an investigation with which Chrysler has fully complied.
Chrysler said it was cooperating fully with Administration to identify and fix 2008-2010 model-year Wranglers equipped with automatic transmissions and sold in China.
“In February 2010, Chrysler issued a global recall to address a potential for transmission fluid to overheat and expel onto hot surfaces that could pose a fire hazard. The conditions were linked to extreme and/or abusive driving conditions under rigorous off-road conditions,” said a spokesman from the company today.
The company was keen to stress that it was not aware of any injuries or accidents due to potential overheating.
In other news, Automotive Logistics will be holding its China conference in Shanghai beginning next Monday, 18 April. Among the top range of speakers attending will be Wei Yong, chief of the Transport and Logistics Division of the National Development and Reform Commission’s Economic Operation Bureau and He Liming, president of the Chinese Federation of Logistics and Purchasing. GM China’s director of Global Purchasing and Supply Chain, Michael Filazzola, and Ford’s director, MP&L, Asia Pacific & S.A, Rick DeMuro will also be speaking. Read more here