Free Trade Zone to Allow Sales of Parallel Import Vehicles
Qianhai free trade zone is planning to introduce parallel imports of cars this year after Shanghai allowed selected auto dealers to register in the free trade zone to sell or import vehicles without the need or consent of foreign automakers. Prices of the parallel import vehicles will be 15 to 20 percent lower than regular vehicles, but these prices will depend on the current foreign exchange rate that may or may not fluctuate.
Experts are saying that this move could weaken the carmaker control over prices since such imports accounts for 10 percent of car imports of foreign luxury brands such as BMW, Audi and Daimler Benz. But these foreign carmakers sat these practice will have little impact on businesses in China. Furthermore the commission didn’t release any requirements for auto dealers to be eligible to deal in parallel imports of vehicles.
In Shanghai, auto dealers need to register in the free trade zone and have five years of operation history and three straight years of profitability before applying for the program. Parallel import vehicles can be sold anywhere in the country and based on Shanghai rules, dealers that joins the program are responsible for ensuring quality and after sales services of these imported vehicles sold.