Safety Second

Patchy safety standards, State-run testing centers invested in the auto industry, and inadequate consumer protection make Chinese-made cars more dangerous, but also help keep the domestic auto industry competitive. What to do?

Li Duxian just bought his second car - a Great Wall SUV which, he proudly tells our reporter, offers him more “face” and convenience than his old Geely compact.

Li, a 43-year-old construction materials dealer from Hunan Province is proud that his new car is usually the first to escape a traffic jam since its elevated chassis enables it to negotiate the sidewalks. He also boasted to NewsChina about its “big power, fancy dashboard and roomy interior.”

“The car looks square and solid, so it must be crash-proof,” Li said. He added that he could not care less about the car’s performance in actual crash testing, apparently trusting in the seemingly safe outward appearance of this monster automobile.

Given that most Chinese people only recently traded in their bicycles, a majority of the country’s drivers are still on their first car and have little knowledge or interest in auto safety, as evidenced by their often jaw-dropping behavior on the highway.

Even if Chinese drivers were interested in automobile crash test performance, there would be no credible domestic source they could refer to.

False Test

The integrity of the China New Car Assessment Program (C-NCAP) has been under scrutiny ever since its introduction in 2006. In 2011, more than 60 percent of all 26 new models tested achieved the maximum fivestar rating, with a further 15 percent achieving a four-star rating, meaning three quarters of all tested cars scored four stars or above. Many have accused the C-NCAP testing centers of fudging test results or simply inventing scores to give domestic automakers an advertising boost. Either that, or Chinese-made cars are among the safest in the world.

With most domestic cars on the market given top marks for safety, few consumers can use this as a criterion for selecting their preferred model, according to independent auto industry analyst Zhong Shi.

Though the C-NCAP has upgraded its test speed from 56 to 64 kilometers per hour since July to bring it in line with its European counterpart, and the number of five-star rated vehicles is expected to drop as a result, doubts remain over the priorities of the agency and its subsidiaries.

The China Automotive Technology Research Center (CATRC), the organization in charge of automobile safety testing, is a Stateowned research firm with interests in the auto industry as a whole. In other words, the cars it tests are often those manufactured by the Center’s own industrial clients, in- centivizing the issue of a clean bill of health for all such vehicles, regardless of their performance in testing. Moreover, automakers have to pay top dollar to have their vehicles tested, and again to obtain the results of the test. For a single model, excluding the cost of the car itself, the center charges 490,000 yuan (US$77,000) for crash testing and data release.

“It is hard to believe that the CATRC offers even ground in crash testing to both clients and non-clients,” said Zhong.

Theoretically, automakers do not have to pay for the cars tested by the CATRC, but most automakers buy back crash-tested cars according to Zhang Jin, the chief engineer of a domestic automaker who preferred not to reveal the name of his employer. Thus, the CATRC has become China’s de facto authority on automotive safety, as well as a major player in the domestic car market.

“To curry favor with the CATRC, many homegrown brands have outsourced their safety design directly to the research center in the hope of a high score in future crash testing,” Zhong told our reporter. “The CATRC could make tens of millions of yuan in profit from a combination of testing and design services.”

Loose Standards

Even if the CATRC crash tests are conducted on a level playing field, the test results themselves say little about the actual safety of a vehicle in certain types of crash. Unlike European and American testing centers, the C-NCAP only demands testing for head-on and side collisions, while rearend and roll-over testing are not conducted, despite these accidents being the most likely to prove fatal.

Also, oil leakage prevention and pedestrian protection are not tested, with safety tests heavily weighted towards protecting the occupants of the vehicle. This seems counterintuitive, as most road fatalities in China are pedestrians and cyclists, who still make up the bulk of road hazards, particularly in urban areas.

Moreover, Chinese automakers have a direct hand in determining certain safety standards, particularly for passenger vehicles such as buses. Bus accidents, which account for about one tenth of the road fatalities in China, are frequently attributed to lax safety standards for manufacturers. Seatbelts are only mandatory for bus drivers and front-seat bus passengers, a regulation which is barely enforced by China’s few traffic police. Buses rarely have more than one exit, and almost never have purpose-built emergency exits or escape hatches, and some coaches have been seen to crumple like paper even in low-speed collisions.

According to Xu Hui, an automobile engineer with Nissan China, the C-NCAP is less strict than its international counterparts because it needs to take into consideration the “technical level” of domestic brands.

“The quality control procedures of home-grown brands are in no way comparable with those of joint venture automakers, given their short development history,” said Xu. In other words, safety standards for domestic cars are automatically lowered to protect the industry rather than road users.

Zhong told our reporter that some Chinese vehicles rated five stars under C-NCAP safety standards might struggle to obtain a two-star rating in a US or European testing center, and that it has even been known for automakers to build special models for market entry testing while cutting corners for their sales models.

Few consumers expect any form of protection were they able to prove a defect, with the court system heavily geared towards manufacturers, many of which have close ties to the government.

Competition

Foreign-branded private cars first entered China in the 1980s by launching joint ventures with State-owned automakers who churned out freight trucks, or handcrafted limousines exclusively for the use of the country’s top officials.

China’s indigenous car brands, most of them privately-owned, only began to emerge in the late 1990s when private individuals emerged as a genuine market for mass-produced automobiles. However, few domestic brands have been able to compete with the prestige of joint ventures, with those able to afford it overwhelmingly preferring foreign-branded cars over domestic brands, which are still seen as a cut-price option for the middle class. Part of the appeal of foreign-branded cars is their perceived reliability, as most models have previously been tested overseas according to US or European standards.

However, keen to reduce costs, many of China’s joint venture automakers have cut corners in terms of the safety of their Chinese-made vehicles, confident of retaining their five-star rating while broadening their market share. For instance, tire pressure monitoring and electronic stability control systems, believed to reduce fatal accidents caused by skidding and blown tires, are a standard feature in most American and European vehicles, but only come as standard for imported and domestically made luxury cars in China.

Stricter safety standards would, however, hit China’s home-grown brands the hardest, as they can generally only compete with joint ventures on price. If indigenous brands were to invest as much as Volkswagen or Audi in safety features and crash testing, then price tags would likely equalize for Chinese-made models, sinking the domestic brands.

Few in China’s government want to reverse the domestic auto sales boom, one of the major driving forces behind growth in domestic consumption in the past few years, particularly as more and more Chinese people are frozen out of the housing market by sky-high prices. In early 2009, at the height of the global financial crisis, China offered generous tax breaks to domestic automakers and subsidies to buyers of subcompact cars, a sector dominated by Chinese brands, boosting consumption and providing a buffer against a slowdown in economic growth.

Domestic brands account for about four-fifths of the subcompact sector, with subcompact car sales representing more than 85 percent of revenues.

In 2009, as the US and Europe wallowed in recession, China’s passenger car sales grew more than half on the previous year, allowing the country to overtake the US to become the world’s largest automobile market.

Consumer Rights

Though car buyers in China are subject to a minimum 40 percent purchase tax, which rises to 140 percent for some imported models it is unclear what these payments are in aid of, as both consumer rights protection for vehicle owners and even national safety standards are virtually non-existent.

More than half of the complaints about vehicles filed by Chinese courts in 2011 were related to safety problems, but the proposal of a lemon law on automobile replacement and repair has yet to be issued despite having been in committee for over a decade.

Since 2004, when China first introduced automobile recall regulations, until 2011, a total of 6 million Chinese-made vehicles were recalled due to safety concerns. In the same year, the US recalled 14.5 million cars, or more than twice of that recalled over the past seven years in China. Though the Chinese government has the power to demand a recall of any deficient model of car, no such recall has been enforced since the scheme was launched, with automakers voluntarily recalling defective vehicles themselves, usually due to public pressure.

According to the automobile engineer Zhang Jin, who himself drives a runabout from his own factory, Chinese consumers are usually more tolerant of defects in home-branded cars, as most expect them to be somewhat unsafe, accepting the risk as a trade-off for a much lower price tag. When encountering a real road crash in a domestically-branded car, the drivers, if they are fortunate enough to walk away from the situation, are unlikely to blame the vehicle.

“In such cases, you have no choice but to trust in fate,” said Zhang.