Here in the Hutong we are looking for ways to lower our carbon footprint while enjoying the conveniences of modern life. Tired of driving a car that is getting too small for the family, not wanting to own two cars, wanting a tough vehicle, and at the same time seeking to lower our carbon footprint, our natural instincts are to look for a vehicle that will give us more room and yet move us to a more sustainable lifestyle.
Despite all of the hype at the Shanghai Auto Show earlier this year, there are not a ton of options out there. The Toyota (NYSE:TM) Prius is too small, so that was out. Our eyes naturally reached the Lexus RX400h as being a pretty good combination, an SUV with a hybrid drive.
Until, that is, we saw the price. For a car that fetches around $43,000 in the U.S., the dealer in Beijing was quoting us RMB 816,000, a tidy US$109,156. Trying very hard to make a sale, the dealer hinted that the standard RX400, without the more environmentally-friendly hybrid drive, could be had for around RMB 700,000, or a full US$16,000 less.
Is there a price difference between the two vehicles? Certainly there is - somewhere around $4,000, if US prices are any indication.
But what this means is that in China, in a nation where air pollution caused by automotive emissions is becoming a serious threat to public health, an environmentally-conscious car buyer is taxed by the government an extra 16-20% for wanting to make a better automotive choice.
Clearly, somebody very senior in government is not thinking this through.
Granted, from a policy standpoint, the fewer cars with large engines that are on the road, the better. And, from the same standpoint, the more domestically-produced cars (rather than imports) on the road, the better. This is the reason that imported cars with engines larger than 3 liters are already subject to a whopping 100% tariff.
But if someone is going to buy that imported vehicle, from an environmental standpoint it makes more sense to do everything practical - up to and perhaps including actually subsidizing that purchase - to encourage the consumer to make the right choice. At the very least, you would not want to penalize the buyer any more than the actual cost differential of the vehicle.
I cannot believe the problem is with the environmental bureaucracy. This sounds like a simple case of the General Administration of Customs doing their jobs and collecting as much money as possible for imported vehicles. To bring about a change, somebody very senior in government needs to get involved.
This sounds like something that, if the large automakers handle correctly, could redound very much in their favor, both publicly and among their dealer community. What I suspect, however, is that the major hybrid-makers (Toyota, Ford (NYSE:F), GM (NYSE:GM), Honda (NYSE:HMC)) are not interested in fighting this battle.
The big question is - why not?