BMW Violates Chinese Policy on Parallel Imported Cars
Published By : 30 Apr 2015 | Published By : QYRESEARCH
According to the reports broadcasted on China Central Television, international car maker BMW has violated the Chinese government’s policy on parallel imported cars so that its only distributer in the nation manages to get some profits. To curb the monopoly of the international car makers such as Mercedes-Benz, BMW, and Audi in Chinese auto market, the government allowed unauthorized dealers of the car manufacturers to sell parallel imported cars at cheaper rates. In China’s free trade zones (FTZ), the car dealers have set up their shops to sell the imported cars. The unauthorized car dealers do not levy handling charges on the cars in comparison to the branded dealers.
However, the number of parallel imported cars sold is not much since the policy got implemented. The main reason has been the price of the cars which are not as cheap as expected. There are restrictions on the car models exported by the unauthorized dealers and the cost of import increases the overall price of the car. In 2014, the BMW X5 SUV was sold at 640,000 yuan by the unauthorized dealers, only 100,000 yuan lesser than those from the authorized dealers. Also, the tariff duty has increased significantly in this year.
Though the Chinese customers seem to lose their interest in the parallel imported cars, Mercedes Benz and BMW has claimed that with such government policy in China, their interests in the nation’s car industry would be threatened. Mercedes Benz would be penalizing the US dealers exporting cars to unauthorized Chinese dealers. According to the chief analyst of China Automotive Industry Consulting and Developing, Jia Xinguang, the profits of the foreign car makers are at stake in the region with such government policies.