China-made ATVs under fire from U.S., Japan producers

Driven by an increase in imports from China, U.S. and Japanese producers have taken the unusual position of asking Congress to approve legislation mandating safety standards for all-terrain vehicles (ATVs), which consumer groups have long targeted as dangerous.

 “It’s somewhat extraordinary for our industry to be asking that standards be made mandatory,” said David Murray of Yamaha, which employs over 3,000 people in the U.S. making ATVs.

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He and others point to the fact that new ATV suppliers from China and Taiwan have not signed voluntary agreements adopted by companies like Yamaha and Honda to meet certain safety standards.

“The safety issue is [that] there are an increasing number of imports coming in not subject to voluntary standards,” said Ed Cohen, vice president of government affairs for Honda.

He and others say they are not just trying to keep out lower-priced imports. Instead, they say the entire industry could be jeopardized if there is a rash of injuries and deaths connected to ATVs from newer suppliers. As a result, ATV makers have shifted their position to support mandatory standards.

According to the Consumer Product Safety Commission (CPSC), about 750 people are killed and 136,000 injured annually while riding ATVs. Many of those killed are children who ride adult-sized ATVs that are heavier and faster than those made for children. It is unclear how many of these injuries and deaths are attributable to new suppliers and how many to traditional ATV producers.

ATVs from China and Taiwan are expected to reach about 500,000 in 2007, which would give them well over a third of the U.S. market. They can cost as much as $1,000 less than an ATV from Yamaha, and can be purchased over the Internet.

Earlier this month, CPSC issued a warning that young people could be injured or killed while riding the Kazuma Meerkat 50 Youth ATV, which the CPSC faulted for several serious safety defects. The CPSC faulted the Meerkat, imported from China, for lacking front brakes, having no parking brake and starting in gear.

The ATV dispute is another example of how increased trade with China is leading that fall short of U.S. health and safety standards. It is also becoming a growing issue in Congress.

Just this week, a U.S. regulatory agency warned a U.S. tire importer it could face millions in fines if it does not recall hundreds of thousands of tires imported from China that may be defective. Health and safety concerns have also been raised regarding Chinese imports of pet food, toys and even toothpaste.

“The biggest concern for CPSC is there are some new entrants that do not fall within current standards for ATVs,” said CPSC spokesman Scott Wolfson.

In the case of the Meerkat 50, CPSC could not ask for a recall because it lacks a quorum of commissioners. However, partly because of these new imports, CPSC is considering new regulations that would make voluntary standards mandatory.

But the Japanese and U.S. producers say it would take too long for CPSC to finish its rule-making process. As a result, they favor action by Congress.

Sens. Ted Stevens (R-Alaska) and Mark Pryor (D-Ark.) are likely to introduce legislation addressing the issue before the
August recess, according to Ed Krenik of Bracewell Giuliani. Krenik said such a bill would likely require all ATV producers to meet certain safety standards for brakes, and for makers to provide free safety training to users.

In a letter last week to the Wall Street Journal, Stevens said he asked Chinese officials to establish strict safety standards for ATVs during a recent meeting of U.S. and Chinese legislators. Stevens also indicated legislation would be forthcoming.

ATVs have long been in the crosshairs of consumer-safety groups. In 1988, companies selling ATVs in the U.S. agreed to discontinue three-wheeled ATVs, which were considered more likely to tip over when in use. The rules being considered by CPSC would formally ban three-wheelers.  

Rachel Weintraub, assistant general counsel for the Consumer Federation of America (CFA), says the new imports are a real problem, but she faults traditional ATV producers for only favoring legislation that tackles imports.

“From our perspective, the problem is much broader,” said Weintraub, who sees the current voluntary standards as too weak. CFA has lobbied for criminal and civil penalties for ATV dealers who knowingly sell adult-size ATVs that will be used by young people. ATV makers oppose such rules, which they say would be impossible to enforce.

“We don’t want this problem with ATVs to bubble up even more,” Weintraub said of the ATVs from China. “But we also don’t want the Senate to deal with ATVs and only deal with imports.”

That would be a missed opportunity, she added.

CFA also opposes a change in rules that the CPSC is considering and that could be in the Stevens-Pryor bill. That change would shift rules so that adult and youth ATVs are classified by speed instead of engine size.