Do Foreign Auto Makers Have a Responsibility to China’s Environment?

Recently, the New York Times’ Auto Section reported that the Chinese auto market is beginning to prefer larger cars. There is a certain logic behind this. An increasing number of Chinese are able to afford cars and it goes to follow that an increasing number can also afford more spacious and luxurious cars. But a cultural shift is also occurring as SUVs are no longer seen as a reminder of the rural setting that many chose to escape by moving to cities.

Auto manufacturers are quick to take advantage of this cultural shift as GM, Ford and Chrysler have all indicated that they will begin promoting and manufacturing S.U.V. models in China. Inevitably, these larger vehicles will consume more fuel, and create more emissions. But what responsibility do auto manufacturers really have toward a society faced with growing environmental woes? Should auto companies voluntarily adhere to more stringent fuel consumption and emissions standards than are currently legislated as a form of social responsibility?

In 1970, the economist Milton Friedman famously wrote an article in the New York Times Magazine in which he stated:

There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.

Whether or not you believe that a business or an industry has a social responsibility, companies do engage in actions that benefit the community or the larger society in which they operate/sell. Some companies, Whole Foods’ Market for example, make these actions a part of their mission statement. Other companies proactively exceed environmental and safety targets set by legislation. Their reasons for doing so may be to head off future costly legislation by showing that even in the absence of more stringent regulation, improvements are occurring. In the example of safety standards, vehicle manufacturers often exceed government crash safety regulations because consumers put safety as a priority when buying a car. Therefore, exceeding the mandated standards is not only socially responsible but a good business decision.

This is an excerpt from an article published on Automotive IQ. To view the full article follow the link below.

Full Article

Will Hornick is the Managing Editor of Automotive IQ

Posted on May 8, 2013, in ALL and tagged , , , , , , , , . Bookmark the permalink. Leave a comment.

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