Recently, the “Administrative Measures for the Import of Auto Parts that Constitute the Characteristics of Complete Vehicles†jointly formulated by the National Development and Reform Commission, the Ministry of Commerce, and the General Administration of Customs entered the final stage of opinion collection and revision. It is reported that the "Measures" may be formally introduced before and after October, and is expected to become the first supporting implementation details of the "Auto Industry Development Policy" promulgated on June 1 this year.
Purpose To encourage the localization of automobile manufacturing
The "Development Policy for the Automotive Industry" just promulgated this year clearly stipulates: "The state supports auto manufacturers in their efforts to increase the local production capacity of auto products, and does not encourage the import of wholly or semi-partially assembled automobiles. In strict accordance with imported vehicles and parts Tax rates shall be imposed on tariffs to prevent the loss of customs duties. Where imported auto parts constitute the characteristics of the vehicle, tax shall be paid on the basis of the tax rate of the imported vehicle. "But industrial policies are, after all, frame-type and programmatic documents, and they are not operability. The formulation and introduction of the "Measures" have given this policy a clear operability.
It is understood that the "Measures" are divided into 6 chapters and 41 articles. The standards for filing management, customs clearance management, and vehicle characteristics, as well as the principles for verification, taxation, and taxation are fully explained. Among them, it is clarified in the General Regulations that imported auto parts and components are to be managed by the National Development and Reform Commission, the Ministry of Commerce and the General Administration of Customs. The 3 ministries and commissions set up an inter-departmental “Leading Group for the Import Management of Auto Parts that Constitutes the Characteristics of the Vehicle†to handle the coordination and the daily work of the “National Vehicle Verification Center for Vehicle Characteristicsâ€.
The "Approaches" part of the "Regulations" emphasizes that car manufacturers will be severely punished if they violate the rules and regulations. The "Measures" stipulates that: "When applying for the "Vehicle Production Enterprises and Products" announcement and concealing imported parts to constitute the characteristics of the vehicle when the record is filed, the imported vehicle parts will be assembled using the decentralized import method to complete the assembly of the vehicle and constitute the characteristics of the vehicle. It will not be submitted to the National Development and Reform Commission. The Ministry of Commerce, the General Administration of Customs and the General Administration of Customs for the record, evasion of customs duties and import value-added tax, and if there is any of the above circumstances, according to smuggling, the customs shall impose additional customs duties and import link value-added tax, and shall impose a fine, which shall be revoked by the National Development and Reform Commission. Catalogue of Vehicle Production Enterprises and Products. If the circumstances constitute serious crimes of smuggling, they shall be transferred to the judicial authorities for investigation of criminal liability."
According to reports, the "Measures" are under the framework of the WTO agreement, the use of tariff adjustment of economic leverage to enhance technological development capabilities, rather than mandatory localized production. It is used in conjunction with industrial policies to guide overseas car giants to establish R&D bases in China, introduce key component technologies and the entire vehicle into China, and prevent China from becoming an auto assembly center, thereby improving the autonomy of domestic auto companies. Its biggest feature is its meticulousness. From the relevant management department to the certification of the localization of the vehicle, it has made clear regulations.
Background "assembling a car" does not help development
In the last century, Shanghai Volkswagen used to be a model in the industry, and Santana’s company is envied by all its peers. However, the 10-year journey of Sangche is now surpassed by its counterparts for a short period of one or two years. One of its means of winning is to rely on the assembly of imported spare parts. Some of the "domestic" new cars imported from overseas are even imported almost entirely from overseas. The only domestic parts are only four wheels. Industry insiders have long noticed this phenomenon and have conducted serious discussions on the issue of "build or assembly."
According to statistics, of the more than 120 existing vehicle manufacturing plants in China, only two companies have annual output of more than 500,000 vehicles, and as many as 95 of less than 10,000 vehicles, among which 70 have annual production of 1,000 vehicles. the following. In the automobile manufacturing industry, where large quantities are only able to cut costs, these small domestic factories have not only failed to close down, but are also profitable. The secret lies in the assembly of imported spare parts. Calculated according to the current tariff rates, the average tax rate for cars is about 35%, and the tariff rate for certain parts and components has dropped to 10%, and the tax difference is 25%. By July 1, 2006, the import tariff rate for complete vehicles was 25%, and the tariff rate for parts and components reached 10% overall on January 1, 2006, when the tax difference was 15%. For automobile manufacturers, the profit can also reach 15%-25%.
The so-called imported parts assembly, according to the international prevailing statement, referred to as KD. KD generally has 3 forms: CKD, SKD, DKD. CKD is a full-range assembly, SKD is a half-part assembly, and DKD is almost a body assembly, and loading four wheels is a complete vehicle. Manufacture of cars in various different KD methods has less investment for manufacturers, simpler staff training and equipment configuration, and lower risks. At the same time, enterprises can complete the original accumulation in a short period of time. Therefore, many domestic companies This rushed.
Nowadays, the formulation and implementation of the "Measures" have strictly imposed restrictions on the production of automobiles by means of imported parts and assemblies. Apart from effectively combating tax evasion, they can also rely on strong policy guidance to promote overseas automobiles. Manufacturing companies will introduce their core technologies and key components into China for localized production, avoiding China becoming a "automotive assembly factory in the world," thereby increasing the autonomy of domestic automakers. In this regard, the experience and lessons of the domestic home appliance industry can be seriously studied and referenced by the automotive industry.
Influence the rapid development of new product development capabilities
After the news about the "Measures" is about to come out, major automakers in the country are calm about this. For reporters' inquiries, most of them refuse to make further evaluations because the documents have not yet been officially announced. However, many experts have conducted in-depth analysis of the impact of this series of new policies on the Chinese auto industry.
First of all, small car manufacturers that rely on imported parts for assembly may be unprofitable due to rising tax rates and gradually withdraw from the industry. Second, those products that are slow to digest after introduction, have a small output, and have a low market share may be “dead†ahead of time rather than being protected by manufacturers as they are now. Again, latecomers who want to enter China to make cars may be more and more difficult, because the establishment of parts supporting system not only requires huge capital investment, but also takes some time.
However, it was also pointed out that the formal implementation of the "Measures" may slow down the pace of launching new domestic cars by various domestic automakers. In particular, those products that are "synchronized with overseas listings" will be greatly affected. Because domestic auto manufacturers often start with the introduction of new products from overseas, they will start with the import of spare parts, rapidly introduce new vehicles, and occupy the market to make profits while gradually completing the localization of important parts. In this regard, industry insiders pointed out that as long as the company has a strong production organization and development capabilities, these sacrifices when launching new products are not too large, on the contrary it will urge companies to strive to improve their comprehensive capabilities from manufacturing to parts procurement, and truly Began to get rid of long-term reliance on overseas auto giants.
In fact, there is a gradual process of clarifying a new policy from its introduction to implementation. Therefore, it is not surprising that many companies are waiting for the formal announcement and implementation of the Measures. However, judging from the specific contents of the “Measures†disclosed so far, it is an indisputable fact that the ability to independently develop and manufacture new products should be the homework that each domestic automobile manufacturer must immediately grab.