Brazil’s government announced that taxes on imported cars and trucks and those that fail to meet localization rates of 65% will be raised by 30 percentage points. The measure will remain in effect until December 2012. It will raise Brazil’s industrial product tax on cars by between 7% and 25%, depending on engine size, to as much as 55% and deliver a blow to China’s car exports to Brazil. According to Fenabrave, the Brazilian car dealers association, Chinese automakers now control 3.29% of the country’s car sales, up from close to 0 % in April 2010. In the first eight months of this year, Chinese automakers sold more than 43,000 vehicles in Brazil, where 2.6 million passenger cars were sold last year. Since last year, a number of Chinese automakers have begun taking advantage of the favorable trade agreements between Brazil and China, which became Brazil’s largest trading partner in 2009. Brazil is being targeted because it is the largest market in the region and offers high-volume sales. The China Passenger Car Association said the new taxation policy will push Chinese automakers to speed up efforts to establish production facilities in Brazil so they can avoid high taxes. China’s biggest auto exporter Chery Automobile Co was first, investing in a USD400 million plant in Brazil in July. The facility will become operational by the end of 2013, initially with a capacity of 50,000 vehicles annually and eventually expanding to 150,000 to 170,000 units a year, depending on demand. Earlier this year, the Chongqing-based Lifan Industry (Group) Co said that it will co-invest USD100 million with Brazilian auto distributor Effa Motors to set up a factory to manufacture Lifan cars in Brazil, with a capacity of about 10,000 units annually.

The board of directors of General Motors has met in Shanghai in its first meeting outside the United States as it prepares to further deepen cooperation with its Chinese partner. GM Chairman Dan Akerson also met more than 700 employees at GM’s regional center. The choice of China for the meeting reflects the country’s crucial status as the world’s biggest market for sales of new vehicles, despite a recent decline from double-digit growth. Akerson’s arrival at the board meeting in an EN-V electric concept vehicle highlights the company’s aspirations to expand sales of so-called “new energy” vehicles in China. GM is due to launch its Chevrolet Volt in China later this year. However, its market prospects are clouded by concerns that China may require the company to share key proprietary technology with its partner SAIC in order for the Volt to qualify for new energy vehicle subsidies. GM and state-owned SAIC were preparing to sign a new technical cooperation agreement. GM’s sales in China rose 13.4% in August from a year earlier to a record 205,885 units.

• The Chinese government is considering a development plan for “new energy” vehicles, according to Su Bo, Vice Minister at the Ministry of Industry and Information Technology (MIIT). He did not give details on when the plan would be approved, or the measures proposed. China is encouraging the development of alternative-energy cars to reduce emissions and fuel imports. Beijing aims to have one million electric vehicles on the roads by 2015, the Ministry of Science says. The finance ministry might also lower taxes on new-energy vehicles and key components.
• Almost 25,000 aging automobiles were scrapped or sold to buyers outside of Beijing in August, an 86% increase on the average for the previous seven months, in response to a policy launched at the start of August, aiming to encourage motorists with cars at least 6 years old to trade them in for a subsidy toward an environmentally friendly vehicle. Motorists can receive up to CNY10,000  to buy a new car from 25 capital dealers. Authorities have set a target of removing 400,000 polluting vehicles from Beijing’s roads by 2015, or over 10,000 a month.
• Sales of Mercedes-Benz cars in Hong Kong have surged 30.1% in the past eight months to 3,815 units and are on pace to trump last year’s record of 4,603 cars – which was up 36.5% from recession-plagued 2009. Sales of the Smart “fortwo” two-seat coupe and convertible rose 376% from a small base in the first seven months of the year to 138 units.
• New registrations of private vehicles in Hong Kong rose to 24,560 units in the first seven months of the year, up 9.8% from a year ago, according to Transport Department statistics. The value of retail sales of cars and parts increased 10.4% during the same period to HKD8.78 billion.
• Hong Kong has 170 electric cars on the road. The number of dedicated public charging positions available to electric car drivers would be raised to 1,000 within a year, up from 300 now.
• Michelin will invest CNY666.7 million in Double Coin Group (Anhui) Warrior Tires Co for a 40% stake. Double Coin Holdings will trim its stake in the joint venture to 40.8% from 68% and Shanghai chemical group Huayi will cut its holding to 19.2% from 32%. The venture plans to invest CNY3.5 billion to build a plant to make 15 million passenger car and light truck tires per year in Anhui.
• The World Trade Organization (WTO) rejected a Chinese complaint against punitive U.S. tariffs on Chinese tire imports. U.S. President Barack Obama in September 2009 imposed 35% additional duties on Chinese tire imports. “The measures taken by the United States in 2009 … are protectionist measures” taken in response to domestic political pressure, China’s Ministry of Commerce (MOFCOM) said. U.S. imports of Chinese tires declined by about 24% in 2010 and 6% in the first half of 2011.
• Wescast Industries said it agreed to be bought by Sichuan Bohong Industry, in a deal valuing the Canadian car-parts maker at about CAD180 million. Wescast is the world’s leading supplier of cast-iron exhaust manifolds for passenger cars and light trucks. To complete the acquisition, Bohong needs to secure committed financing from the China Development Bank (CDB) before December 30. Bohong has assets of around CNY3 billion, annual sales of nearly CNY4 billion last year, and more than 2,300 employees.
• Some Chinese carmakers are complaining that they are unable to get access to cutting edge technology in their joint ventures with foreign companies. “Take a product 20 years old and tweak a few parameters. It’s like displaying mutton but handing over dog’s meat,” Xu Liuping, Chairman of Chongqing Chang’an Automobile, said. “If this can be counted as innovation, shame on the Chinese [car] industry,” said Xu, whose company operates a venture with Ford Motor and Mazda Motor.
• China has introduced a more stringent standard for the subsidy scheme for fuel-efficient carmakers. They will be able to receive a subsidy of CNY3,000 a vehicle for cars weighing 1,205 kilograms to 1,320 kg and consuming no more than 6.3 liters of fuel per 100 km, lower from the previous 6.9-liter threshold, the Ministry of Finance said. Under the new rules, the Ministry has reduced the 16 vehicle weight categories to seven classes. The government had handed out subsidies of CNY10.7 billion for 3.57 million energy-saving cars by the end of August.
• Shares in Great Wall Motors slumped 8.9% on their Shanghai trading debut on September 28. Its A-shares only enjoy a 56% premium to its H-shares. Great Wall’s domestic IPO represents 11% of its existing share capital. The company’s newest SUV model – the H6 Hover, made at its newly opened Tianjin plant – became available for sale in August. The H6 is one of four new models that Great Wall will launch this year. Great Wall posted a 109% surge in first-half earnings to CNY1.81 billion from a year ago. Sales jumped 49.8% to CNY13.67 billion.
• Car plate prices in Shanghai rose to the highest in 45 months to CNY52,622 on average in September, CNY394 more than in August. The average price was the third highest ever. The all-time high of CNY56,042 was set in December 2007. The average price has risen about 35% since the beginning of this year. A license plate is now even more expensive than the small compact car Chery QQ, which sells for CNY51,000. The city government offered a record 9,500 plates this month, 500 more than in August in an attempt to ease demand, but the auction attracted 22,268 bidders, 9% more than in August.
• Efforts by a record 148 Chinese cities to join World Car Free Day on September 22 largely failed, as traffic congestion remained the same as usual. In Shanghai, the reduction of traffic was less than 1% according to the authorities. Many blamed the media for not sufficiently popularizing the initiative. Some cities took measures to promote public transport and to designate special no-car zones. In Beijing, a scenic area around the Olympic stadium was designated as a no-car zone, but the area is generally free of congestion anyway.
• Magna Steyr, the product engineering and manufacturing unit of Magna International, opened a new engineering center in Shanghai. The center is designed for 500 employees and can build up to eight prototype vehicles per week. Magna Steyr began operations in China in 2004. It now runs four engineering centers including one in Wuhan which focuses on industrial services.
• Shanghai Volkswagen, the joint venture between SAIC Motor Corp and Volkswagen Group, reported a 14.4% increase in sales between January and August this year to more than 700,000 units at a time when the overall auto market edged up just 3.3%.
• General Motors and its partner SAIC Motor agreed to co-develop a platform for a new generation of electric vehicles in China, the first joint development between a Chinese auto company and a foreign auto group. The Pan Asia Technical Automotive Center will serve as the development center for the new EV architecture. Vehicles produced under the partnership will be sold in China under the Shanghai GM and SAIC brands.

Novelis, the world’s largest producer of rolled aluminum products, is expanding its business in Asia with the opening of operations in China, Philip Martens, President and Chief Executive of the United States company, said. The company, a subsidiary of India’s Hindalco Industries, is investing USD400 million this year to build up its aluminum rolling capacity and recycling infrastructure in Asia. Novelis has established an office in Shanghai and appointed James Liu, previously Vice President at Alcoa International (Asia), as the Managing Director of China operations. Aluminum consumption in China is forecast to grow 12% this year to reach 18.5 million tons.

United Company Rusal’s Deputy CEO Oleg Mukhamedshin expects aluminum exports to China will start to increase substantially next year. The gap between demand and supply in China will create an opportunity of 4 million tons a year for the company by 2015, he said. Rusal’s sales to China grew 15% in the first half and will continue to increase over the next decade because of the country’s fast urbanization and industrialization. Production capacity in China might total 25 million tons this year, while output could reach 20 million tons, according to Bloomberg News. About 50% of the producers in China are operating at high cost because they face high electricity costs by global standards, Mukhamedshin said. Rusal has located 80% of its production capacity in Siberia, where it can take advantage of hydropower, which provides cheaper electricity than that generated by coal. China has since 2003 been trying to rein in excess aluminum capacity. Aluminum smelting accounts for about 6% of China’s total electricity use, according to the data provider Shanghai Metals Market, the China Daily reports.