Official procurement rules out JVs models

　　According to The Time Weekly, an amendment to official vehicle procurement standard which draws all car manufacturers’ attention is to be released. “Only the self-owned brands win a procurement proportion of not less than 50% .The general procurement standards appear a great downward trend. Car for ministerial level officials should be less than 350,000 Yuan and with a displacement of lower than 2.5 liters. Car for vice-ministerial level officials should be less than 300,000 and with a displacement of lower than 2.5 liters. The ordinary official vehicles are confined to 1.8 liters and 160,000 Yuan or less.

　　The sources told reporters that the amendment which has got approval of multiple national ministries is expected to be issued in the near future. “The new standard will screen out the majority of joint-venture car models. Although some models can meet the standards, its design is more like family car other than official ones.” One staff from the Procurement Center of some department under the Central Government confirmed the news.

　　According to the statistics of China Machinery Industry Federation, as one of the largest items of government procurement, only the fiscal expenditure of 2008 for the procurement of official vehicles amounted to 80 billion Yuan, a 20% of 400 billion Yuan government’s procurement quota of the whole year. No other administration in the world can match China in procurement scale. It is a so huge a market that allure the foreign automobile manufacturers. Just as Xue Xu, a professor of Peking University School of Economics said “We can stamp out the foreign funded brands’ passion for bidding simply by lowering down the procurement prices.” the forthcoming new policy will have the multinational giants suppress their ambition to continuously dominate Chinese official vehicle market.

　　The source claimed “the new standards for ordinary official vehicles begin to take effect within procurement system of departments directly under the central government at the end of 2008. Once the New Deal implemented, local governments will adopt the same standards.” One leader within the procurement system told the reporter, “The proportion of JV brands will be reduced sharply.”

　　For local car manufacturers, what is most wroth celebration is new deal also stipulates that the procurement proportion of self-owned brands should be no less than 50%. “Compared to sales promotion, the exemplary role of the government official cars has a far-reaching significance.” Dong Yang, Secretary-General of China Automobile Manufacturers Association said so. It will undoubtedly encourage enterprises to promote their own R & D and strengthen Chinese automobile industry. In fact, to encourage the self-owned brands will benefit not only the manufacturer. “There is a problem that auto parts of JVs basically come from JVs or wholly-owned enterprises while independent brands usually purchase components from local companies. Therefore, the development of our self-owned brands can boost the whole industrial chain.” XU Changming, director of Resource Development department of State Information Center explained.

　　(Translator: yalong/ Jessie)

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　　http://auto.sohu.com/20100226/n270439015.shtml