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Guidelines to fight monopoly in China auto-parts market
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CHINA has unveiled a new set of guidelines for the auto-parts market in an effort to break the monopoly of manufacturers.
Under the guidelines jointly issued yesterday by the National Development and Reform Commission and nine other ministries, auto-parts makers will be allowed to sell their products directly to non-authorized dealers and consumers.
Auto parts are first sold to manufacturers, who resell them to dealers before being offered to consumers. The process has given automakers the leverage in deciding the prices of the auto parts.
China recently fined about 12 auto companies for antitrust practices.
China’s after-sales market for vehicles has grown rapidly but “the market structure is irregular, less transparent and honest,” the ministries said.
The guidelines states that auto manufacturers must release the technical and pricing information of newly introduced models, including imported vehicles, to all maintenance companies in an “unbiased and timely” manner.
The latest efforts are set to break the potential monopoly of the 4S — sale, spare part, service and survey — dealerships, and help boost fair competition and give consumers more choice, industry veterans said. “The new rules, if implemented well, will benefit consumers,” said Ronald Xu, an auto dealer in Shanghai. “It will beef up competition among the manufacturers.”
In August, 12 Japanese auto parts suppliers were fined 1.24 billion yuan (US$201.92 million) for price fixing. This month, FAW-VW, which handles Audi sales in China, and Chrysler were fined for price fixing. Mercedes-Benz and Volkswagen AG have also been found guilty of antitrust practices.
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