ASEAN+1 to Boost Regional Auto Parts Trade
The free trade agreement (FTA) signed between the Association of Southeast Asian Nations (ASEAN) and China (ASEAN + 1) became effective the first day of 2010.

The ASEAN + 1 is the other top-3 trading bloc than the West’s NAFTA (the North America Tree Trade Agreement) and the European Union (EU). With a population of 1.9 billion people and over US$6 trillion in combined GDP, the ASEAN+1 certainly has the potential to become the world’s largest trading bloc.

The ASEAN + 1 FTA signed by China and the founders of ASEAN, Thailand, Malaysia, Indonesia, the Philippines, Singapore, and Brunei, reduces tariffs to nearly zero—roughly 0.1-0.6%% covering over 90% of commodities or over 7,000 items traded among the signatories. The other four ASEAN members of Vietnam, Myanmar, Cambodia and Laos will follow suit by 2015. Meanwhile, Japan, South Korea, and India have expressed interest to join the ASEAN + 1 trading bloc.

Since the signing of the FTA by ASEAN + 1 in 2002, the members have been cutting gradually duties in the ensuing years, hence helping to stimulate auto parts trade in the region. It has been a thorn in the sides of non-ASEAN countries like Taiwan whose auto parts shipment to ASEAN is subject to very high tariffs: 91% by Vietnam, 40% by Thailand, 35% by Malaysia, and 31% by the Philippines. Obviously Taiwan’s auto parts makers are at an insurmountable disadvantage relative to ASEAN counterparts.

Taiwan’s auto parts export to ASEAN has declined by an estimated US$6 million annually in the past year. By contrast, China’s overall trade with ASEAN has nearly tripled from US$78.2 billion in 2003 to US$231.1 billion in 2008. The ASEAN+1 FTA will give Taiwan’s auto parts makers even more reason to move production to China or ASEAN to level the current playing field laid down by such FTAs among ASEAN and China.

China Counters US-proposed Punitive Tariff
Retaliating against the US-proposed punitive tariffs on auto tire imports from China, China announced several countermeasures last August: anti-dumping duties and strict anti-subsidy inspections for American-imported auto parts and chicken.

Prior to the August announcement, China’s Department of Commerce held several meetings to discuss such issue, and finally decided on countermeasures when the White House approved the punitive tariffs targeting China’s tire imports.

The U.S. levies a 4% import duty on China-made auto tires, but will raise such rate to punish alleged dumping by Chinese exporters. The American Congress proposes a 3-year punitive tariff program on tire imports from China, raising duties to as high as 39% for the first year, 34% for the second, and 29% for the third.

The proposed punitive tariffs are regarded the last line of defense before the Americans declare all-out trade war on China. However, resorting to such strategy would further worsen the American’s unfavorable position, especially in light of its administration’s low-interest loans of tens of billions of dollars to the automakers.

China’s Department of Commerce claims that the U.S. lacks sufficient evidence to prove China dumps auto tires in the American market, suggesting that the Americans merely choose to retaliate due to the “unfair” pricing advantage wielded by Chinese auto tire makers. Actually news reports surrounding the issue don’t mention if the alleged dumping undermines western auto tire makers’ bottom-line or market shares stateside. Budget-priced tires would threaten established brands only in exclusively price-sensitive segments, which may not be all across the U.S. A recent tire comparison test done by a leading American car magazine shows that Asian-branded, budget-priced tires lagged clearly in wet braking and other key measures against Michelin and other leading western counterparts.

“Dumping” apparently does not help China-made auto tires in a downturn: sales in the U.S. declined 16% in 2008 and grew only 2.2% in 2007.


Demark Plans Nationwide EV battery-recharging Network
Truly serious about going green and following generous subsidy, favorable taxes offered to electric vehicle (EV) buyers, Denmark recently announced anther major policy to boost EV applications: In December, Denmark’s largest power company Dong Energy signed a contract with Better Place, a battery supplier based in Silicon Valley, to develop a nationwide battery-recharging network.

“The battery-recharging station number will increase to 100,000 to serve thousands of EV drivers in the country by the end of 2010,” said Better Place CEO Shai Agassi.

Such projection may be overly optimistic. Denmark imposes tariffs on imported cars as high as 200%, making a US$20,000 foreign sedan tagged about US$60,000 in a showroom. In contrast and showing sincerity to promote EVs, Denmark exempts EV imports from duties, even offering US$40,000 as incentive to each new EV buyer. Despite such generous incentive, only 497 EVs are licensed in Denmark, a nation bent on keeping its land clean: many years ago a Dane said in Taipei that all restaurants in the country are equipped with an alarm, which can be rang if even one roach or rat is spotted to call for official exterminators to action.

Recharging EV batteries quickly remains a nagging problem to turn such green vehicles into fully practical transports. Currently an EV typically requires five hours to fully recharge to run only 100 miles. Dong Energy’s joint venture with Better Place aims to correct such issue: building a nationwide recharging network would help make EVs more user-friendly. Denmark has only 55 recharging stations now. Another goal is to tap wind power, currently supplying 20% of electricity in Denmark, to fuel the “pumps.”

One key concern is the high cost: around US$1 million to build one station; while only Renault-Nissan produces EVs rechargeable in the stations planned by Better Place.

France to Join “Battle of Electric Cars”
The French government announced last October its joining the “Battle of the Electric Cars,” investing 1.5 billion euros to launch 2 million electric or hybrid cars by 2020.

The French ecology minister Jean-Louis Borlo said the nation is prepared to join the battle and aim to lead the world in the field of eco-friendly energy, with its electric car plan covering industrial research, battery manufacturing, eco-car production, nationwide battery charging network etc.

The plan will see France set up at least 1million battery-charging stations by 2015 along roads, in parking lots and residential communities, and another 3 million by 2020.

In addition, the French government will budget 125 million euros to help Renault Motors establish a battery production line, as well as 150 million euros for Renault Motors to establish a new factory to produce electric cars.

If all goes according to plan, France may turn out 100,000 electric cars by 2015, realizing a 27% market share in the nation of zero emission vehicles with a production value of around 15 billion euros.

Taiwan Signs MOU with American Telematics Counterparts
Taiwan’s two major talematics research units, the Institute for Information Industry (III) and the Taiwan Telematics Industry Alliance (TTIA), signed a Memorandum of Understanding (MOU) with two Michigan-based counterparts, the Connected Vehicle Proving Center (CVPC) and Intelligent Transportation Society of Michigan (ITS Michigan), in a telematics conference held by the Telematics Promotion Office (TPO) under the Ministry of Economic Affairs (MOEA) in Taipei. The TTIA, sponsored by Hon Hai Precision and other major IT firms in Taiwan, signed the MOU during the conference on Oct. 8, 2009.

The cooperation projects will help Taiwan to further develop telematics or intelligent transportation systems meeting international standards, said a TPO official.

The research institutes in Taiwan believe tapping the nation’s IT and auto parts manufacturing strengths is an effective way to build telematics as another key industry in Taiwan.

The MOEA says the global telematics market value, including hardware, software, and services, has reached US$4.2 billion, with a potential to grow 20% annually.

American DOE Steps Up Green Car Program
The U.S. Department of Energy (DOE) will reportedly invest US$2.9 billion to develop eco-friendly transportation vehicles over five years, primarily to support EV battery and facility research through cooperation with universities and other academic institutions.

The White House has literally become a carmaker as it bailed out the Big Three automakers after the global crash, and the next program to build green vehicles aims to help them develop sustainable eco-friendly cars, said congressman Gary Peters.

In June 2009, the DOE offered US$5.9 billion to Ford Motor and US$2.1 billion to US-based Nissan factories to engage in R&D related to hybrid and EV battery development.

Favorable official policies have driven markets in the desired direction: statistics show the sales of energy-efficient cars have risen for five consecutive years. The White House aims to achieve average energy efficiency of 35.5 miles per gallon by 2016.
　　
Singapore Starts EV plan
Singapore’s Energy Market Authority (EMA) said last November that the Merlion State will begin its electric vehicle (EV) pilot plan when the first batch of EVs arrive sometime in 2010.

With the 50 EVs, made by Taiwan-based China Motors, scheduled to arrive in Singapore in September, the EMA will formally launch the green cars by 2015, expecting the EVs to be popular public transport by 2020.

For the three-year pilot project, the EMA has set up an ad hoc committee to handle all related issues, major concerns of which are the ubiquitous recharging convenience and relative high cost. Casual observers would believe that Singapore is ideal to adopt EVs as popular, personal-mobility solution, for the island nation is only about 25 kilometers across, renowned for cleanliness and level of affluence. So a single recharge enables a driver to commute considerable distance, while only a few recharge stations are needed considering the size of the nation.

(by Michelle Hsu)