The Chinese government over the weekend issued a rule requiring government officials to buy only Chinese-branded cars. The rule is intended to help support the country’s automakers who have seen sales fall from the heights of two and three years ago.
According to The Wall Street Journal report, the impact on foreign car sales in China is likely to be minimal because government auto purchases account for a “small part” of auto sales in the country. Automakers like Toyota Motor Corp. (NYSE: TM), General Motors Co. (NYSE: GM), and Ford Motor Co. (NYSE: F) are unlikely to feel much effect from the new rules. A statement from Volkswagen AG sums up the situation well:
The majority of the Volkswagen Group China’s sales are conducted with private costumers. The amount of the so-called fleet sales with government vehicles has been at a lower single-digit percentage range for years.
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