China’s Official-Vehicle Purchases Include Only Domestic Brands

China issued a preliminary list for official-vehicle purchases this year that excludes all foreign brands.

The list contains of 412 domestic brands from companies including BYD Co. (1211) and Geely Automobile Holdings (175) Ltd., the Ministry of Industry and Information Technology said in astatement posted on its website yesterday. Five alternative- energy vehicle brands are included.

The 2012 vehicle-purchase list indicates foreign brands such as Daimler AG (DAI)’s Mercedes Benz and Volkswagen AG (VOW)’s Audi, that have been traditionally among those selected by the government, are out of favor to their local competitors. The ministry’s statement didn’t specify whether the list covers vehicles used by all government bodies, including those at senior levels.

China issued rules in November on vehicle procurement by government and Communist Party agencies to better regulate official car purchases and increase transparency of the procedure. The government said it’s also part of its efforts to cut administrative costs, save energy and reduce pollution.

Vehicles used for official purposes, such as tax collection and criminal investigation, must not have an engine size of above 1.8 liters and cost no more than 180,000 yuan ($28,571), according to the rules. Manufacturers must have spent no less than 3 percent of their core revenue on research and development in the past two years, the rules say.

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