Beijing Benz criticized for questionable dealership policies

Gasgoo.com (Shanghai April 1) - Beijing Benz, the Daimler AG and Beijing Automotive Group (BAIC)-owned joint venture, has seen relations with its dealers strain due to lukewarm sales results and recent vehicle restriction policies. The Shanghai Morning Post confirmed today that the China Automobile Dealers Association (CADA) has requested the JV at the behest of several dealers to halt monopolistic practices. CADA made the request after conducting a study following complaints from dealers that Beijing Benz was limiting vehicles sold and forcing them to set minimum prices.

According to the CADA, Beijing Benz had sent a notice to dealers on March 1 forcing them to adhere to the JV's price standards in selling C-Class and E-Class cars. The notice also requested dealers to follow other policies, such as prohibiting dealers from showcasing Mercedes cars in areas that Beijing Benz deemed off-limits and restricting dealers from using third party sources (such as agencies and other middlemen) to gain customers. Any dealers to be found violating any of the rules would either be fined or would have their salary bonuses withheld. The JV also forbade dealers from publicly announcing the notice.

The CADA criticized Beijing Benz saying the policies were not only illegal, but also failed to consider the unique situation of Beijing-based dealerships, harming both dealers and consumers.