China to extend 'parallel import' car scheme to Tianjin

May 31
6:28 AM 2015

A trial program allowing unauthorized dealers to sell imported cars will be extended to the northern city of Tianjin, China's state media said on Sunday, as the government moves to rein in high-end car prices.

Cars sold by unauthorized dealers are often cheaper than those sold by dealerships which are authorized by car companies, but come with little or no after-sales service or quality guarantee.

The so-called "parallel imports" scheme was first launched in Shanghai's free trade zone in February.

The program will be extended to Tianjin in June, the overseas edition of the People's Daily, the ruling Communist Party's official newspaper, said.

There is already a flourishing gray market in imported cars centered around Tianjin.

Publicly, Beijing says its pilot scheme will promote competition and give consumers more choice, but people close to policymakers say it is one of several measures aimed at lowering car prices in China, which are far higher than elsewhere.

For the luxury car marques such as Audi, BMW and Mercedes-Benz, the move to rein in prices comes on top of weakening sales growth in the world's biggest market, tensions with dealers, and a recent price fixing probe.

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