Changan fine to set industry example

Cars for Chongqing Changan Automobile Co on display in Yichang, Hubei province. Beijing's environment authority fined the company after several of its models failed to meet municipal emissions standards.[Photo/China Daily]

Automaker is first Chinese brand penalized for emissions violations

Environment authorities throughout China will likely clamp down on emissions violators in the auto industry after two models from a major Chinese carmaker failed to meet emissions standards in Beijing, said industry experts.

The capital's environment authority fined Chongqing Changan Automobile Co after several of the carmaker's Raeton sedans and CS75 SUVs failed to meet the city's emissions standards. The CS75's onboard diagnostics system, which monitors emissions in real-time, also did not function properly.

Changan, which has a joint venture with Ford, is the first Chinese brand to be punished for car emissions violations. According to the authority's notice on Jan 6, it will have their "illegal gains of 12.60 million yuan ($1.91 million) confiscated" and will be required to "pay 3.78 million yuan as a fine".

Both models were produced at the automaker's plant in Beijing, where the China National V Emissions Standard is in place, and passed tests before they hit the local market.

Both made it onto a list of recommended models issued by the Beijing government that could replace autos that do not meet the city's emissions standards.

The automaker apologized for the problems in a statement on Jan 13, stating that the faulty cars were the result of technical accidents.

Its president, Zhu Huarong, said 2,186 cars were affected and 90 percent of them had been fixed by Jan 14.

Changan ranked first with its sales of a million Chinese-brand cars last year. Its CS75 was one of the most popular SUVs in the Chinese market, with monthly sales reaching 15,583 units.

Zhang Zhiyong, an independent auto analyst in Beijing, said Changan's punishment could set a precedent and that authorities in other cities will follow suit to strengthen their emissions examinations.

"They will definitely do so. The conventional way is giving a checkup before cars hit the market but now it seems there are loopholes. Besides, improved checkups might bring in more income."

Dong Yang, executive vice-president of the China Association of Automobile Manufacturers, has long urged Chinese automakers to learn from Volkswagen's emissions scandal.

"Are there problems similar to Volkswagen's in China? I think there are. Chinese automakers are technologically backward compared to Western ones, our supervision is not as strict as overseas and our consumers are relatively more ignorant and tolerant," Dong recently wrote on his blog. "So those in the auto industry should remember that we are in a pillar industry, what we produce is closely related to people's lives and we must be careful, careful, careful."

But Zhang is not comparing Changan's problems with Volkswagen's scandal.

"They are totally different. There is not intentional purpose in Changan's faulty cars and that marks a difference."

Zhang expects that the Changan incident will serve as a warning to other automakers because "such failures will cost money and more importantly corporate reputation".