China: Shanghai to start testing parallel car imports image

The country’s government has announced it decided to speed up the development of a trial program designed to test the possibility of introducing parallel car imports in Shanghai’s free-trade zone.

The world’s largest auto market has been crippled by many scandals regarding prices imposed by foreign brands on vehicles and spare parts. This move could lead to lower prices for imported brands – the trial is poised to see cars delivered to China without using a brand’s distribution network, which should lead to better pricing. According to brokerage Sanford C. Bernstein the cheaper parallel imports, if successful, would add pressure on carmakers to lower their prices in China.

The Chinese government’s State Council said in a statement that was issued late last month that it’s ready to modify rules and step up the work to implement the direct-import test program in the zone, according to a filling posted today on the central government’s website. There were no details on the timetable for the program.

According to people that had knowledge of the government’s future plans, the officials are also discussing whether to ease restrictions on car dealership networks, allowing them to showcase different brands in the same venue and even allow them to import cars from a brand without the carmaker’s authorization.

Via Bloomberg