New Duty will Likely Not Impact Chinese Consumers Who Want Luxury Imports

Tim Dunne

I appreciated recent comments from one of our readers, Tim S. from Wisconsin, about a post “New China Duty Only Impacts Makers of Vehicles with Larger Engines” on the minimal impact of a new duty that has been imposed by the Chinese government on cars imported from the U.S.

I want to address some of the reader’s questions and concerns.

First, what percentage of vehicles with larger engines are produced in China by General Motors and Ford? Between GM and Ford, approximately 99% of the vehicles they produced in China in 2011 were fitted with sub-2.5-liter engines.

As for GM and Ford vehicles that are exported to China from the U.S., I would guess (the data is not readily available) that nearly the opposite is true, and that nearly all are fitted with engines greater than 2.5 liters. But let’s put things into perspective: In 2011, GM and Ford built and sold nearly 1.6 million vehicles in China, but their combined exports to China from the U.S. were only some 35,000 vehicles (or a ratio of 50-to-1 of locally built vs. imported vehicles.) Continue reading ›