Foreign automakers under pressure in China image

Carmakers like Daimler AG and General Motors are already selling more vehicles in China than they do in the U.S., but the question remains at what cost.

The two car brands, along with Audi, Chrysler and other automakers have been under investigation by China’s regulators, who have already given fines worth more than $200 million to Japanese auto parts suppliers for allegedly fixing their prices. While the country’s President Xi Jinping promised to open up the Chinese economy to foreign competitors, a new study claims the contrary.

A survey done by the American Chamber of Commerce in China stated that 60% of the 365 respondents answered they feel “less welcome in China” compared to 2013 when only 41% of them had the same response. Around half of those questioned complained that they are targeted for “selective and subjective enforcement” by Chinese regulators, with a growing sense that the local manufacturers are being protected in the face of foreign competitors.

A number of senior automotive industry executives have discussed the situation in China over the past months, but few were willing to take action, fearing any further actions from possibly angry regulators.

Meanwhile, the Chinese regulators say that automakers are charging too much for their spare parts and they are not the only ones. India has levied fines against a range of car makers and suppliers with the biggest penalty being given to local automotive giant Tata Motors. The U.S. on the other hand has brought civil and criminal charges against a series of Japanese parts makers for alleged price fixing with several senior managers being sent to jail.

By Gabriela Florea