China prepares to end foreign control over domestic sales network

Shanghai. March 13 (Gasgoo.com) – Chinese Ministry of Commerce is preparing to revise The Regulation on Automobile Brands  in a bid to end  foreign automakers' monopolization over sales networks. So far, China Automobile Dealers Association has held a string of seminars and conferences on this problem, the Shanghai Securities News reported today.

 

Despite continuous declines of local-made automobile prices over the past decades in Chinese market, the average prices of imported automobile are increasing by 7 percent annually over the past years.

"Regulations on Automobile Brands is a major factor behind the price growth of imported vehicles,” said Su Hui, general manager of Asia Olympic Village Automobile Trading Center in Beijing. “If you want to improve this situation, you have to change the Regulations.”

 

Since the execution of Regulations on Automobile Brands three years ago, all global automakers have taken control of sales networks of their brands and thus monopolized the sales of imported cars. Consequently, these global companies have taken complete control over the pricing of imported cars, Su said.

 

On a Forum sponsored by China Trading Center for Automobile Imports in January, Wang Qinhua, an official from State Council said that “The Regulations have created an uneven level field for China’s domestic auto sales companies and foreign automakers. Foreign automakers have monopolized the sales networks of imported vehicles. By contrast, Chinese automakers in Sino-Foreign joint ventures are losing rights of speaking.”

 

According to official Customs Statistics, China imported a total of $7.52 billion worth of autos or chassises in 2006. However study shows Chinese customers paid nearly a total of $10 billion for these imported vehicles. That means about $2.5 billion profits are taken away by auto sales companies controlled by foreign automakers, Shanghai Securities News said.