Chinese public revved up over govt luxury car list

(Xinhua)
Updated: 2009-06-13 22:06

BEIJING -- China's Internet commentators have officials in their headlights after the government put luxury car makers BMW and Mercedes-Benz on the procurement list of "official" vehicles.

Tens of thousands of people joined a public debate after the two brands for the first time joined 36 other automobile brands on the central government procurement catalogue for 2009-2010.

Based in Shenyang in northeast China's Liaoning Province, BMW Brilliance Automotive Ltd. is a joint venture established between Munich-based BMW group and a domestic company, Brilliance China Automotive Holdings Ltd.

Mercedes-Benz entered the catalogue with its provider listed as Beijing Benz-Daimlerchrysler Automotive Co., Ltd., a joint venture founded by Beijing Automotive Industry Holding Co., Ltd., Daimler AG and Daimler North East Asia Ltd.

The listings caused controversy on major Internet portals including Sina.com.cn, tianya.cn, and 163.com, with many opposing the decision and advocating more support for Chinese-brand cars.

"The government is splurging taxpayer money on officials' comfort," said "Yedong2000" on tianya.cn. "If they have to buy, the government departments should play a leading role in supporting the domestic auto industry."

Some, however, said BMW could be regarded as a home-made product as the cars were produced by a joint venture company, though it was not a domestic brand.

"Some media reports only highlighted BMW, but ignored the information that it's home-made simply for sensationalism," an Internet commenter from Jiangsu Province said.

Lou Xiaomi asked, "How long would it take for common people to be able to afford this kind of luxury home-made car?"

According to a government automobile support plan released earlier this year, domestic-brand vehicles are required to account for 50 percent of new official cars.

BMW and Mercedes-Benz are well-established as symbols of luxury in China. BMW models are priced from 283,000 to 503,600 yuan (73,665 US dollars) China, while Mercedes-Benz cars are priced from 428,000 to 518,000 yuan.

According to government regulations, ministers and provincial heads should have cars with an engine displacement of up to 3.0 liters and priced below 450,000 yuan. For a vice minister, the car should be priced below 350,000 yuan.

Meng Wei, public relations manager of BMW Brilliance Automotive Ltd, was cited by Saturday's Beijing News as saying the company would offer discounts for government purchase to meet the criteria.

The newspaper also quoted unnamed sources from the two companies as saying that they expected to sell more than 10,000 cars to the government.

According to China National Radio, the government selected BMW as one of its car providers because it is of "good quality, energy efficient and has low emissions, is priced within government limits and has a good reputation."

It would break Audi's dominance in the official car market, China National Radio reported Friday. The government bought almost 20 percent of all Audi cars sold in the country.

Sales of Mercedes Benz in China surged around 45 percent year on year to 38,700 units in 2008.

More than 11,000 Mercedes Benz vehicles were sold in the first quarter of this year, an increase of 28.6 percent year on year, among which sales of vehicles produced by Beijing Benz in the same period shot up 140.9 percent year on year, according to the Beijing Times.

Data released by BMW shows its sales increased 29 percent to 44,980 units in China in the first three quarters of last year, including 25,026 units of BMW 3 Series and 5 Series produced in China.

Government procurement is craved by the automobile manufacturers.

Chinese government organizations bought 39,500 vehicles in 2000, the figure rose to 500,000 in 2007 with a total expenditure of 80 billion yuan, accounting for a fifth of the year's total procurement spending, according to the Procurement Center of the Central People's Government (PCCG).

Established in 2003, the PCCG is a procurement agency for the central government ministries and commission.