WCA May 2008

Chinese car manufacturers must source 40% of parts by value in China to avoid the higher tariff rates for finished cars. The United States and the EU say that China promised not to treat parts as whole cars when it joined the WTO in 2001. The WTO decision, an ‘interim ruling’ for now, will be officially released later in the year. Beijing will thereupon be given a ‘reasonable period of time’ to make changes in line with its WTO commitments. A separate panel would then have to rule on the Chinese compliance. Meanwhile, the progress of the case is certain to be closely watched by such automotive parts manufacturers as Delphi Corp (Troy, Michigan), the world’s largest, with some 50,000 employees in the United States. This present complaint, initiated in 2006, marks the first time Western trading nations have banded together to seek a formal WTO investigation into China’s trade practices. Friction has grown as the trade deficits of the US and Europe with China have widened. The US deficit with China for 2007 is expected to exceed a record $250 billion. The EU trade gap with China rose by 25% in the first 10 months of 2007, to $195.5 billion. Hyundai joins ‘the best for 2008’ in the US, already dominated by Asian car makers Nine of the ten cars cited as ‘Top Picks’ in the annual auto issue of Consumer Reports are the products of Asian companies; and Hyundai, a newcomer to the pantheon, is represented by two cars. Honouring a South Korean auto maker for the first time, the April issue of the influential publication named the Hyundai Elantra SE and Santa Fe best small sedan and midsize sport utility vehicle, respectively. Asian car makers have headed the annual list in recent years. The sole US vehicle to make it this time is also the first domestic entry to be a top pick since 2005: the Chevrolet Silverado, a pick-up truck from General Motors. While Hyundai’s share of the US market was just 2.9% in 2007, its stellar showing in Consumer Reports may change that for the better. David Champion, the senior director of automotive testing at CR, commented that ‘[Hyundai offers] a very, very nice, competent car with all the bells and whistles for a very reasonable price, that’s going to be reliable as well.’ Each Top Pick scores at or near the top of its category among more than 260 vehicles recently tested. Each has an average or better predicted-reliability rating, based on the problems subscribers reported on almost 1.3 million vehicles. Starting this year, Top Picks also must provide a critical safety feature, electronic stability control (ESC), either as standard equipment or as a readily available option. Toyota models won top honours in four categories: ‘green’ car for fuel conservation (Prius), luxury sedan (Lexus LS460L), small SUV (RAV4), and minivan (Sienna). The Nissan Infiniti G35 was named best upscale sedan; the Honda Accord best family sedan; and the Mazda MX-5 Miata ‘most fun to drive.’

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Wire & Cable ASIA – May/June 2008