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Parallel imported cars are granted certification in the Shanghai FTZ

China’s certification authority today granted a 3C (China Compulsory Certification) to parallel imported vehicles in Shanghai’s free trade zone, offering a legitimate identity for parallel imports of cars for the first time.

Shanghai Waigaoqiao Automobile Exchange Market Co Ltd received 3C, a mandatory safety mark for a majority of both domestically-manufactured and imported products in Chinese market, for parallel imported BMW X5.

“It’s a significant move that paves the way for more parallel imported car models to get the certification,” said Zhang Min, general manager of the Waigaoqiao auto market.

It came after China’s top certification authority last year streamlined 3C accreditation process for parallel vehicle importers, allowing them to get the certification without the authorization of manufacturers. It’s considered as an important step to remove a key obstacle for the growth of parallel-imported businesses.

China in 2014 started the a trial program that allows independent auto dealers registered in Shanghai free trade zone to directly import vehicles from a foreign production base, a sales channel that is parallel to authorized dealers. The program was later expanded to FTZs in Guangdong, Tianjin and Fujian.

Parallel-import cars are usually 10 to 20 percent cheaper than the prices offered by authorized dealers, but sales through parallel imports failed to meet expectation due to limited choices of models, poor after-sales services and the complicated certification process.

Previously, only dealers franchised by manufacturers can apply for 3C. Independent deals used to get around the regulatory pitfall by importing cars in the name of aftermarket tuning factories to qualify as manufacturers under what is known as “minor 3C.” The whole process, including crash tests and disassembles, can be costly and time-consuming.

“The regulatory obstacle for parallel imports of cars now has been cleared. Whether there will be a remarkable growth in sales volume will be dependent on parallel importers’ capability to build a purchase network in overseas markets,” said Shen Weihua, vice chairman of the Shanghai Municipal Commission of Commerce.

The regulator of Shanghai free trade zone yesterday pledged to joint hands with piloted dealers to step up after-sale services for parallel imported cars, introducing measures including setting up special auto parts warehouse for after-sale maintenance and setting up a special fund to guarantee after-sale services.



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