New Chinese emissions regulations could result in hundreds of thousands of unsold European cars entering the Chinese market.

For many years, Western automotive brands , including those from Europe and North America, have thrived in the huge Chinese market.

However, the imminent arrival of rule 6b has complicated things for these brands. Although the rule was due to come into effect in July this year, it appears that it will not as dealers have lobbied the government for a six-month moratorium. This request was made to give dealers more room to sell their current large stock. Sales have been down for a long time, especially for European brands.

"Introduce a moratorium in order to prevent a disastrous situation."

According to MarkLines data reported by The Driven , sales of French cars fell by 46.4% between January and February 2023, while those of German brands fell by 21.2%. Sales of Asian companies were also affected, especially those of Japanese (-40%) and Korean (-22.4%) brands, as well as North American companies (-12.5%).

In comparison, Chinese brands suffered a minimal decline of just 0.1%, despite the 6b regulation which requires cleaner engines and prevented the sale of hundreds of thousands of internal combustion cars already manufactured since July. Although Chinese manufacturers are turning to electric models, many exported brands still offer thermal engine cars.

This situation has raised concerns about sales and inventory of unsold cars. Regulation 6b reduces the polluting emissions of new models between a third and half of those authorized since July 2020 by regulation 6e .

The China Vehicle Dealers Association ( CADA ) has sounded the alarm over the large stock of unsold cars, which needs another six months to clear. Dealers have asked the government to give them more time to adapt to the 6b standard based on European Union and United States regulations .

This standard was originally scheduled to come into effect on July 1, 2023 , but will likely be postponed until January 1, 2024, as requested by dealers who have government approval.

However, after this date, non-compliant vehicles can no longer be sold and manufacturers must speed up production and offer promotions to stimulate sales.

Details on the new deadlines and requirements will be released in a few days by CADA and the National Business Daily .

It is difficult to say whether the moratorium will be effective. According to The Driven, more than 25% of new cars sold in China are electric, showing that Chinese consumers are increasingly choosing emission-free or plug-in vehicles. Indeed, sales of these cars have increased by more than 90% in 2022 compared to 2021, in just six months.

In comparison, Europe experienced a drop in car sales due to technological uncertainty linked to the arrival of the WLTP standard , which was aggravated by the pandemic and the component crisis, leading to several years where the million units has not been reached. In 2022, only 813,396 cars were sold, which is the worst year in the last three years.

Industry faces a dilemma between emission reduction requirements and manufacturers' needs. A relevant example is Europe, which plans to ban the sale of petrol and diesel cars from 2035, but leaves a possibility for thermal cars thanks to e- fuels , under pressure from Germany. However, in addition to domestic problems, European companies are faced with the reality of the Chinese market.