Beijing Puts Brakes on Military Car Perks

Published on Author croland

A BMW Z4 in Shanghai.
In its latest effort to decrease signs of official corruption, China’s new leadership is focusing on high profile, military officials’ perks–their rides.

With new license plate systems for vehicles, luxury cars such as BMW and Bentley will not receive military license plates unless they are registered as military property. Vehicles with military plates are often seen violating traffic regulations but they are rarely stopped by policy and also are exempt from toll charges.

The new system, part of President Xi Jinping’s anticorruption drive, is the most visible move yet against corruption in the military. In an attempt to help local brands, Beijing is proposing steps that would require officials to purchase domestic brands for government fleets.

It isn’t clear how the new rules and emphasis on domestic brands will hit foreign automakers. As we have learned in class and through our reading, China has been a highly profitable market for foreign automakers. How will these new rules affect domestic and foreign automakers in China? 

Source: WSJ

6 Responses to Beijing Puts Brakes on Military Car Perks

  1. Judging by the lack of serious cutbacks they are making on officials cars, some luxury brands may see a infinitesimal drop in sales, but overall these effects will likely have little effect. Until more drastic measure are undertaken, my prediction is that BMW and Bentley will see little change in their current profits. The cars may even become more of a status of wealth in the government showing how people who have them do not benefit as much as others who have different luxury brands. It will be interesting to see how this may change the demand.

  2. My question becomes, how large is the vehicle market for people who are able to obtain military plates. I doubt that it is a large enough market to seriously effect any foreign automaker, though I could be wrong. However, the article does depict a way in which government officials are attempting to remove corruption in their armed forces. It certainly does convey the wrong image when vehicles belonging to military personnel are habitually seen breaking the law with seemingly no consequence.

  3. My question is just like Will’s – how big of an impact will this actually have? To me, knowing little about this particular issue, this strikes me as a very minimal way to drive down “corruption”. I believe that it is probably a problem, but this article seems more important towards the PR of an anti-corruption campaign, rather than actually having a huge impact.

  4. Interesting. Good queries on the importance viz. the car market. Now the other issue is whether the current group of rulers can lessen the political clout of the military – remember that the government came to power through civil war. Visible abuse is a potential tool to go after someone via political channels. So corruption, yes, but also political competition.

  5. Between the banning of high priced liquors and the military plates, I agree with “claud” in that I feel that these are all very symbolic ways to fight against corruption, which can easily be circumvented by government officials. Will this truly help legitimize the government or is it just the new government’s way of appeasing their citizens? Furthermore, since the new leaders are also emphasizing enhanced military prowess as part of their political agenda, will the power and corruption of the military ever be truly addressed?