FTZ to have ‘parallel imported’ vehicles
Print Edition
SHANGHAI will soon allow “parallel imported” vehicles into its pilot free trade zone to offer consumers an alternative distribution channel away from that authorized by carmakers.
This experiment of allowing car dealers to import cars directly from abroad is expected to break the stranglehold of imported car pricing held by carmakers’ trading companies in China, especially after the country’s anti-trust campaign against foreign carmakers raking in huge profits made headlines earlier this year.
The strong sway foreign carmakers have in pricing, together with tax differences, is said to be responsible for a yawning gap, three times more expensive, between prices of imported cars in China and abroad.
A regulation in 2005 that all imported cars must be brought in through a general distributor, which is often set up by the manufacturers, is responsible for the price difference.
It is not yet clear how owners of parallel imported cars can get after-sales service similar to cars imported into China through the carmakers’ own channels. But this issue is being closely looked into after the State Council, China’s Cabinet, gave the go-ahead for parallel import of vehicles.
Gu Jun, deputy head of the Shanghai Commission of Commerce, said rules are being drafted to resolve the issue.
Possible solutions include building a special service center for parallel imported cars for their registration, insurance, tax, repair and maintenance, or using the existing dealerships.
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