Shanghai - China is taking aim again at foreign luxury car makers such as Audi, BMW and Mercedes-Benz by allowing unauthorised dealers to sell imported cars - so-called 'parallel imports' - in a move to rein in high-end car prices.
Publicly, Beijing says the pilot scheme, which will kick off officially in Shanghai's free trade zone next week, will promote competition and give consumers more choice, but insiders say it's the latest in a series of measures aimed at bringing down prices that are far higher in China than elsewhere.
For the luxury car brands, the move comes on top of weakening sales growth in the world's biggest market, tensions with dealers, and a recent price-fixing probe.
A lawyer who attended a closed-door seminar last year said officials at the ministry of commerce and the national development and reform commission - China's top economic planning forum - made clear their intention was to cut the price of imported premium cars.
BREAKING MONOPOLIES
“Legalising parallel imports is part of a broad anti-monopoly campaign,” he explained.
A year ago the China Automotive Technology and Research Centre, a government-affiliated think-tank, lobbied Beijing to legalise parallel imports “to break monopoly and promote competition”.
Sales of premium cars rose by more than 20 percent in 2014 to about 1.6 million vehicles but still accounted for less than 10 percent of China's total car sales. Together, Audi, BMW and Mercedes-Benz held about 70-80 percent of the market.
More than 20 dealers have applied to join the pilot scheme, selling imported luxury models about 20 percent cheaper than those available through franchised dealers.
A BMW 650i xDrive Convertible that sells from $97 900 (R1.115 million) in the United States, can cost close to two million yuan (R3.643 million) in China. That scale of price differential has come under fire from Chinese media, and regulators last year fined a Chinese venture of Audi and the local Chrysler sales unit a combined $46 million (R524 million) for price fixing.
Reuters