Gasgoo.com (Shanghai September 2) - The anti-monopoly crackdown of the Chinese automobile market is destined to be one of the major industry events of 2014. The investigation is targeted at ending monopolistic practices and reducing excessive automobile prices in the industry. However, many automobile dealerships and many own brand manufacturers doubt that the investigation will actually achieve this goal.
A dealership representative attending the recent Chengdu International Motor Show shared his perspective: "Looking at the present state of affairs, manufacturers are only reducing the prices of poorly selling or already overpriced automobiles. As a matter of fact, market conditions already dictate that manufacturers which don't actively reduce their prices will see their sales fall. Also, the only automotive parts that are having their prices reduced are generally those that don't need to be replaced anyway."
Furthermore, many manufacturers have been accused of passing on the costs they are suffering to dealerships. Representatives from several dealerships, including those selling Mercedes-Benz and Volvo automobiles, have admitted that manufacturers have only slightly lowered the prices at which they supply parts from dealerships, leaving them to suffer the brunt of the costs.
Aside from dealerships, many analysts worry that the anti-monopoly investigations may inadvertently harm the sales of own brand manufacturers. As prices of foreign automobiles and automotive parts decrease, they will compete alongside more economically-priced own brand models. When asked whether or not he agrees with that statement, Changan Automobile President Zhang Baolin answered that they absolutely will. However he added that own brands will be forced to produce more competitive products.
Since July, several major players in the automotive industry have been found guilty by the investigations of engaging in monopolistic activities. Among them, Audi and Cadillac, as well as 12 Japanese auto part suppliers, are facing stiff penalties. Many manufacturers have responded by lowering the prices of their automobile and auto part products.
