China’s government to stop buying foreign brand vehicles for officials image

China’s government plans to stop buying cars from foreign brands like VW Ag, Audi or BMW, threatening to lock them out of an estimated $13 billion segment of the world’s biggest vehicle market.

All 412 models approved for purchase by state agencies this year will be limited to Chinese brands, according to the Ministry of Industry and Information Technology. The preliminary list is open for public consultation until March 9, according to the ministry.

The announcement will help local brands gain in the government fleet’s 80 billion yuan ($12.7 billion) market at the expense of foreign carmakers such as Volkswagen AG, General Motors Co. and Toyota Motor Corp., China International Capital Corp. said in a report today.

Overseas brands have accounted for about 80 percent of the official pool, with Audi making up about one-third of government and state-linked enterprise fleets, according to Guotai Junan Securities Co.
In a 2009 plan to restructure and revive the automobile industry, the State Council, China’s cabinet,said that all levels of the Chinese government should ensure that domestically made cars shouldaccount for more than 50 percent of their official fleets.

Last year, the Chinese government’s new official vehicle-purchasing policy said that thepercentage of homegrown branded cars for official use should be increased.

“State leaders in many countries ride their home-brand vehicles and I think our own officials should do so as well,” said Dong, who’s involved in drafting the government vehicle procurement list that’s in the final approval stage.