The European Union Chamber of Commerce’s China arm urged the country’s government to allow more competition for the vehicle after-market service as current regulations are the reason for the monopoly situation.
Even if they regulate better the market, China’s policies had led to parts supply being controlled by automakers as a result of the obligations set for them. The car parts are only distributed to the carmakers’ authorized dealer shops, which leads to a very high repair part price.
The Chinese antitrust regulators have probed the auto industry for over-priced spare parts as in April a report from the Insurance Association of China and China Auto Maintenance & Repair Association found that replacing all the components of a Mercedes C-class sedan could cost 12 times the price of the same new car. The investigations that led to seven automakers cutting prices for their spare parts prompted the European chamber to claim that foreign companies were especially targeted.
The chamber pressured China to revise its current regulations as to ensure “free and balanced” competition in the after-market. It said that original parts-makers should be allowed to sell components to independent repair shops at lower prices. Restrictions on part makers to sell to independent after-market dealers limit the choice for consumers. This way, buyers are forced to choose between stores controlled by car manufacturers, which often charge high prices, or turn to the fake products market.
By Gabriela Florea