A year of leaps in progress

Tempered expectations for growth in industry

A slowdown in China's economy has led to a concurrent slowdown in the vehicle market, although in the first quarter of the year, vehicle sales in China rose by 5.98 percent year-on-year to 6.53 million units, according to the China Association of Automobile Manufacturers, beating 2015's growth pace.

It is widely seen as impossible for the auto industry to regain double-digit growth, which will exacerbate competition between carmakers and further bring down prices. The auto association has predicted that vehicle sales in China will grow 6 percent this year. Liu Jiao / For China Daily

New tax cut for buyers of small cars pays off

The central government last October began cutting taxes on new small passenger cars as an interim measure to boost sales.

According to the policy, purchase taxes will be halved for buyers of new passenger cars with an engine size of 1.6 liters or smaller. The policy, which is to expire at the end of the year, has paid off－the market has grown slightly faster since the fourth quarter of last year, especially in small cars. Liu Jiao / For China Daily

Anti-monopoly guideline to clamp down on industry

An anti-monopoly guideline for China's auto industry, the first of its kind for a single sector, is expected soon. The National Development and Reform Commission, which sought public opinion on a draft of the guideline from March 23 to April 12, aims to cover auto sales practices, after-sales services and the supply of spare parts to online car sales sites and the maintenance of parallel imported cars.

As a result, carmakers and dealers in China will face stricter rules. Over the last two years, carmakers, spare parts suppliers and dealers have been fined a total of 2 billion yuan ($307.8 million) by regulators because of monopolistic practices. The latest penalty was handed down on South Korean tire producer Hankook, which was fined by Shanghai pricing authorities for 2.18 million yuan earlier this month for manipulating prices. Yan Zhi / For China Daily

Buyers decry resale of cars damaged in Tianjin blast

Cars damaged during the massive explosions in Tianjin Port last August, after undergoing refurbishing, have come back onto the market, raising anxiety among customers in China. According to CCTV, several customers in Hebei and Henan provinces said their newly purchased Chrysler Jeep vehicles were ones damaged during the blasts. The explosions affected around 3,400 vehicles from Chrysler, Volkswagen, Renault, Toyota and Hyundai. According to Chinese media reports, more than half of the imported vehicles arrive in China through Tianjin Port every year. Shan Haihan / For China Daily

Bevy of automakers teaming with high-tech companies

More carmakers have joined forces with internet companies to develop and produce electric cars with connectivity technologies. At the beginning of April, Shanghai-listed JAC Motor clinched a 10 billion yuan (1.54 billion) deal with NextEV on new-energy and smart cars as well as connectivity technologies. The first electric model will be launched at the end of next year. NextEV is one of China's startups aspiring to make electric and smart supercars and is backed by Tencent Holdings and Hillhouse Capital. In February, internet firm LeEco agreed with Aston Martin to form a joint venture to produce cars. Their first electric car, the Rapid E, will hit the market in 2018 with powertrain and connectivity technologies from LeEco. Provided To China Daily

Scandal deals major blow to VW's brand image

Volkswagen AG has been hit hard by its emissions scandal in September. US regulators discovered that the German carmaker had installed software on its diesel engines to allow its cars to evade pollution tests. The company admitted that it fitted 11 million diesel vehicles with the software.

In China, its biggest single market, almost 2,000 imported cars have the software installed on them, though Volkswagen last year announced it would recall these affected cars. Experts say the emissions scandal has dealt a major blow to Volkswagen's brand image in China, although it has vowed to continue its huge investment plans in China. Dong Yang, vice-president of the China Association of Automobile Manufacturers, said last year that it would take Volkswagen a decade to recover from the scandal. Zhou Jianping / For China Daily

Corruption-marred carmakers name new heads

Top executives at FAW Group and Dongfeng Group, two State-owned automakers ridden by a slew of corruption scandals, changed hands last May. Xu Ping, former chairman of Dongfeng, was designated chairman of FAW, while Zhu Yanfen, former deputy party chief of Jilin province, was named chairman of Dongfeng.

Both Xu and Zhu face a number of a challenges, such as dealing with alleged internal corruption, reviving their brands and strengthening cooperation with foreign partners. Zhu was chairman of FAW before being deputy party chief of Jilin. In March last year, then FAW Chairman Xu Jianyi was under investigation for suspected discipline violations. In November, Zhu Fushou, then Dongfeng general manager, was also under investigation for discipline violations. Provided To China Daily

Takata airbag issues force slew of recalls across globe

More than 3.8 million cars from nine different brands have been recalled across China since last April due to safety problems involving airbags produced by Japanese company Takata Co. China's quality watchdog has issued recalls for more than 40 domestically produced and imported models made from 1999 to 2014 from Honda, Nissan, Mazda, Toyota, Subaru and BMW, among others. More automakers are investigating airbags supplied from Takata. In the Unite States, carmakers have recalled 28.8 million vehicles because of safety issues with airbags from Takata. Toru Hanai / For China Daily

Nation sets path for automated technology

Chinese officials and experts urged improvements to regulations in the sector and called for the establishment of cross-ministry cooperation on automated and connected vehicles, specifically autonomous driving technologies. Changan Automobile has just conducted an autonomous driving test from Chongqing to Beijing, after BMW and Baidu's joint test in December in Beijing. Technically, these tests on public roads are illegal in China, because current regulations prohibit drivers taking hands off the steering wheel. In contrast, surveys have found high acceptance among Chinese people of the new technologies. But to advance the technology, carmakers and institutes need to work in a favorable environment, at least validating the insurance. The majority of the similar tests were conducted by international carmakers in the United States. Provided To China Daily