Break Manufacturer Monopoly: Dealer Management Regulation Expected Change in November

“Anti- monopoly” has extended to automobile circulation. It might trigger bigger chain reaction.

At present, MOFCOM has launched (hereinafter referred to as ) revise. Jinjun Shen, vice executive president and secretary-general of China Automobile Dealers Association, told reporter of < China Business News > that it is possible for relative government department to announce revise at annual meeting of China Automobile Dealers Association.

From the industry opinion, which published by MOFCOM in 2005 has contributed to “monopoly action” in automobile circulation. As reporter known, new will be drove to limit manufacturer power, and rebalance rights and obligations between manufacturers and dealers.

Danyang Shen, spokesman of Ministry of Commerce, said that MOFCOM is researching revise. When he is asked about the reasons for revise, Danyang Shen said that automobile suppliers and brand dealers has tense relationship recent years. Problems such as forcing dealers to adopt business model, charging deposit for shop building, forcing dealer to digest inventory and bundle sales has increased prominently. MOFCOM will take consumer right protection in the first place. It will rule business operation, and refine relative regulations. Secondly, MOFCOM will limit shop building deposit, bundle sales etc. behaviors, and help to maintain balance relationship between automobile suppliers and dealers.

From the industry perspective, the main reason for “monopoly action” formed in automobile circulation is because of the published by MOFCOM in 2005. The “authorized sales” clause is the original source for automobile manufacturer monopoly. stipulates that the same automobile brand sale network building should be implemented and made by a domestic company…… oversea automobile manufacturer selling in China should authorize Chinese companies or set a sales company in China as its franchisor. Xinguang Jia, a famous automobile industry analyst said the regulation was published to protect consumer right and strength government control for automobile industry circulation area in the first place. But it strengths manufacturer right, and breaks the balance between manufacture and dealer. So it is not hard to understand “monopoly” and “excessive profit” of automobile suppliers.

Therefore, government realizes that it is necessary to reorganize automobile circulation area. Besides, China Automobile Dealers Association told media that the association has contact with government about the revise.