China Boat Slowing?

admin

U.S. officials, politicians and the powersports industry are working together on a multiphase program to limit the importation of substandard powersports products.

At the same time, changes within China could result in a drop in imports later this year. The country has taken steps to reduce exports in response to international safety concerns and quality issues covering a wide variety of products.

Many Chinese manufacturers front-loaded their exports in the first half of the year to beat changes in tax rebates that became effective July 1, but it's uncertain how extensive this tactic was among powersports exporters. Reductions in tax rebates usually mean increased retail prices.

At the same time, China took steps last month to reduce the growth of low-end, labor-intensive manufacturing. New rules on imported commodities including plastics and metals are expected to add more than $1 billion in costs for Chinese exporters. This move also could increase the costs of Chinese powersports products.

Analysts see the moves as an indication that China wants to emphasize high-quality exports such as bio-medical devices, not just low-end plastic toys.

But don't look for major quality changes overnight in the powersports units sold here.

Safety Standards

In July, the American National Standards Institute accepted new ATV safety standards. The ANSI-SVIA 1-2007 standard was developed by the Specialty Vehicle Institute of America and others and replaces the standard that has been in place since 2001.

Several changes are aimed at making ATVs safer for youths: additional safety features, the limitation of machine use to certain types of individuals, and improved training and information that must be provided to buyers.

The standard defines a Type II unit as an ATV that is intended to carry a passenger behind the operator. Type II ATVs are limited to riders who are at least 16 years old. A similar standard is being developed for UTVs.

More than 90 percent of recent youth ATV fatalities occurred when youths were riding adult-sized ATVs. The standards are expected to reduce youth ATV accidents sharply.

While the ANSI standards are not mandatory, they are expected to improve ATV quality. Major ATV manufacturers, most of which are SVIA members, are expected to meet the standards. OEMs that don't could face increased liability exposure.

New Restrictions

Federal officials and politicians are working to make the new safety standards mandatory, a move that would dramatically change the ATV landscape. Sen. Ted Stevens (R-Alaska) introduced legislation in July that would make the ANSI standard mandatory.

A key provision in Sen. Stevens' bill (S. 1815) would require each ATV OEM or importer to submit an action plan for approval by the Consumer Product Safety Commission before it could sell units. The bill also prohibits the sale of new three-wheel ATVs and requires increased labeling and certification. Several senators and the SVIA support Sen. Stevens' bill, but it's not likely to become law until next year.

Meanwhile, the CPSC is pushing for the authority to set its own mandatory standards. The CPSC could adapt much of the ANSI standard, but it likely would use only the portions that apply to safety. Noise standards, for example, probably wouldn't be included.

The CPSC also wants to make it illegal to sell a product after a recall announcement, wants companies to respond to CPSC inquiries within 10 days (down from 30 days), and wants the $1.85 million cap on civil penalties to be raised, possibly to as much as $20 million.

Look for the number of new Asian imported ATVs to drop as these restrictions are implemented over the next year.

Contributing editor Joe Delmont is editor and publisher of The Delmont Report newsletter and B2B website www.powersportsupdate.com. Contact him at joe@powersportsupdate.com.