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Despite recent WTO ruling, China's JV automakers vow to increase local content
Shanghai. February 15 (Gasgoo.com) – Despite World Trade Organization’s recent ruling against China over taxation on imported auto parts, China's joint venture automakers reaffirmed their commitment to increasing local content on cars they produce.
The World Trade Organization on Wednesday issued its first official condemnation of Chinese commercial practices, siding with the United States, European Union and Canada in a dispute over car parts, the Associated Press reported yesterday.
The WTO found that China was breaking trade rules by taxing imports of auto parts at the same rate as foreign-made finished cars, according to a copy of the ruling's conclusions obtained by The Associated Press.
"BMW will commit itself to promoting localization rate in China, which is of vital importance to our future. And that’s a top priority in China’s government policy on automobile industry,” said a public relations official from BMW Brilliance Automotive Co Ltd.
In 2007, BMW increased the number of its auto parts suppliers from 60 to 100 and total value of auto parts sourcing in China surged to 3.6 billion yuan ($500 million) from 2 billion yuan ($278 million). BMW sales in China rose 37 percent to 27,000 units last year.
Company officials from Beijing Benz and FAW-Audi also said they would increase the local content of their cars in line with Chinese government policies.
"Even if China loses the case and is forced to slash taxation on imported automobile parts, most automakers will continue to purchase in China due to price advantages," said Zhong Shi, a senior auto industry analyst in Beijing.
United States and the EU, joined by Canada said on Wednesday they had won a preliminary ruling on the case, even though the final ruling is not expected to be made public until the second or third quarter of this year.
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