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With parallel import regime, China aims to curb the prices of luxury cars.
China takes aim at new car manufacturers such as Audi foreign luxury BMW and Mercedes-Benz allowing unauthorized distributors sell imported cars - called parallel imports - in a move to curb prices high-end cars.
Publicly, Beijing said a pilot project, which officially begins in the free trade area next week in Shanghai, will promote competition and provide more choice to consumers, but people close makers say it is the last in a series of measures to bring down prices that are much higher in China than elsewhere.
For luxury car brands, the movement is over weaker sales growth in the largest market in the world, tensions with the dealers, and a recent probe pricing.
A lawyer who attended a seminar behind closed last year said officials from the Ministry of Commerce and the National Development and Reform, economic planner high in China, have clearly their intention was to reduce the high price of imported cars range.
Luxury car sales are gaining momentum Monday, December 8, 2014 4 hours 15 and 22 March.
Parallel imports are legalized part of a broad anti-monopoly campaign by the government to improve the market price and to bring down imported cars, he said, asking not to be identified because he is not authorized to speak to the media.
In a proposal sent by email reviewed by Reuters, China Automotive Technology and Research Center CATARC, an affiliated think tank government pressured Beijing it a year ago to legalize parallel imports to break the monopoly and promote competition.
Sales of luxury cars has increased by more than a fifth last year to about 1 6 million vehicles, by automotive consultancy Foresight Shanghai Co Ltd, but still account for less than 10 percent of total car sales China Together, Audi, BMW and Mercedes have 70-80 percent market share in the premium segment.
More than 20 dealers have applied to participate in the pilot program, which imported luxury models will be sold at a price of 10-20 percent to those available through authorized channels, said an official of the Shanghai Automobile Exchange Market Waigaiqiao, the market organizer.
A BMW 650i xDrive Convertible that sells 97900 in the United States, can cost nearly 2 million yuan in China 320179 This price difference of scale is under fire from Chinese media, and regulators last year fined Chinese venture Audi and local sales unit of Fiat Chrysler combined 46 million for price fixing.
China had a gray market auto sales for some time, centered around the port city of Tianjin, where about half of the total import price of Chinese cars are made, but buyers were cautious view the lack of quality assurance and after-sales service unauthorized cars.
The main significance of the pilot project is that buyers are now legally entitled to warranty packages if their car is imported by a licensed or not channel, said analyst IHS Automotive Namrita Chow.
Analysts said it was difficult to assess the likely impact on car prices given the lack of clarity on the models subject to the parallel import regime.
In a statement said he was sent by email, Audi said its dealer network in China has been very well prepared for the competition, while BMW said it doesn t expect a significant impact on China, owns Mercedes-Benz, too early to comment.
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