Highlights in New MIIT Rule on Auto Admission
On December 6, 2018, the Ministry of Industry and Information Technology (“MIIT”) of the People’s Republic of China (“PRC”) released the Administrative Regulation on Admission of Road Motor Vehicle Manufacturer and Products (“New MIIT Rule”), which will take effect from June 1, 2019. With the aim to address the rapid development of the auto industry, the New MIIT Rule introduced a series of changes to reform the regulatory regime for the market admission of automobile manufacturer as well as the admission of auto vehicle products. It unifies various rules governing admission for different categories of road vehicles into one, and trims down the laundry list of matters subject to MIIT approval so as to reduce the administrative burden on the auto manufacturers. The new changes also addressed recent dynamics of auto industry practice, such as intelligent vehicles, contract manufacture of whole vehicles and upper body of trucks. Large auto group companies will also have greater flexibility in respect of intra-group sharing of production capacity and other functions. We see these as the PRC regulators’ efforts to address innovative development of the auto industry as well as the production overcapacity in the PRC auto sector.