A Buick dealership in Shanghai, China ended up with an overstock of cars he couldn’t sell due to China’s strict emissions rules. The dealer was stuck with 80 sedans and SUVs that don’t comply with the new China-6 emissions standards set by the government on July 1st, 2019.
To cope with the situation, the dealership slashed the price of the remaining defunct stage-5 vehicles a full 30 percent back in May, contributing to what the Chinese auto sales industry is referring to as an unprecedented widespread discounting. The situation went so far, that a Peugeot dealership even offered a free 301 compact car to customers who purchased a 5008 SUV.
The transition from China-5 to China-6 emissions rules hasn’t just caused a headache for car dealers, it has had an impact on the nation’s economy as well. Chinese auto sales during the month of May plunged 16 percent from last year, with an annual decline expectation of 5 percent. What’s more, just 21 percent of the cars sold in May met stage-6 standards.
Given that smog has become a major public issue in China, Beijing declared war on emissions five years ago, with the aim of mitigating environmental pollution. The situation is so urgent that the stage-6 emissions standards, which are regarded as the most stringent in the world, were rushed in ahead of time by China’s national government.
That led to inevitable chaos for the entire Chinese auto industry. On top of being stuck with cars that don’t meet emissions standards, dealers assume the cost of shipping these cars to other cities and provinces not yet affected by the new rules.
But the main question that arises from this crisis is why the Chinese government didn’t give automakers sufficient time to adapt their vehicles to the new laws. Carmakers need to add catalytic systems and develop new powertrain features in order to reduce a vehicle’s overall emissions footprint. Though the former procedure is faster than the former, neither one can be performed overnight.
Meanwhile, the process for a new vehicle to gain regulatory approval can take six months to a full year, not counting the testing of these systems.
“The problem is the cost and the amount of time it takes to design specific components into the design of a given engine”, said a China-based GM engineer.
However, some carmakers, like Volkswagen and Nissan, claim to have been ready for this switch as far back as February of 2019.
While the transition to China-6 emissions standards was hard on automakers, dealerships, and the economy, some consumers ended up receiving a great deal on a brand-new vehicle that meets China-5 regulations.
Source: The Japan Times