In response to the anti-monopoly investigation initiated by the China Development and Reform Commission, the European Union Chamber of Commerce in China, which represents the interests of more than 100 European auto parts makers and related companies, has recently issued a document saying that the Chinese government will endeavor to crack down on monopolistic behavior in the auto market and require vehicle manufacturers. The control over the sales of auto parts in China was released, and the government was advised to break the scope of auto parts manufacturers' sales at the policy level.
Automotive Manufacturers Control Parts Sales
The European Union Chamber of Commerce in China stated that automakers have controlled China's parts and components markets and other after-sales services, leading distributors and consumers to pay higher prices. The European Union Chamber of Commerce in China pointed out in a document stating that the current supply of spare parts is completely controlled by auto manufacturers and sold only to its authorized dealers, resulting in high parts prices, forcing distributors to generally assume the responsibility of maintaining automobiles and The burden of spare parts inventory.
In actual operation, 4S stores will sell parts and components with the manufacturer's serial number to the user at a very high price, and their parts suppliers will sell the same parts with their own brands and numbers to independent repair shops. Even though these components are exactly the same in the manufacturing process, in China, the selling price of 4S stores is usually more than twice that of independent repair shops. However, in Europe, the price gap between the two sales channels will not exceed 20%.
In fact, parts suppliers are already dissatisfied with the monopolistic behavior of automakers, but due to their reliance on automakers, parts suppliers can only choose to endure. Industry sources stated that parts suppliers may be afraid of retaliatory commercial actions by automakers, and are therefore reluctant to issue non-confidential statements or complaints when faced with restrictive actions. The European Union Chamber of Commerce in China stated that automakers should be treated equally with parts suppliers, and have the ability to fully intervene in the auto aftermarket, so that consumers can purchase high-quality auto parts products at lower prices.
Parts prices down "perfunctory"
Previously, at the beginning of the anti-monopoly big club, many auto manufacturers have chosen to lower the price of parts and components in response. However, in the absence of huge profits and related laws and regulations, this time the price reduction is a little perfunctory.
Since July this year, Mercedes-Benz, BMW, Audi, Jaguar Land Rover and other automakers have announced that they will lower the prices of original spare parts. However, most of the specific parts and components given by the government are non-consumable parts. A dealer admitted that from the point of view of the specific parts and components given by the government, only the price adjustments were made to some parts that are not easily damaged. Even if an accident occurs in a vehicle, these parts need to be replaced because the vehicles are already insured. It will also be borne by the insurance company, and the practical significance of price reduction is not great.
Industry insiders said that automakers dared to delay the announcement of price cuts because they did not break the monopoly of automakers in the aftermarket. It is understood that in the "Automotive Industry Development Policy" and implementation measures "Implementation Measures for Automobile Brand Sales Management", the exclusive rights granted to the general distributors of automobile manufacturing enterprises to designate or select authorized distributors to conduct sales and aftermarket services in China. . In response, the European Union Chamber of Commerce in China recommends that the existing "Automobile Industry Development Policy" and "Implementation Measures for Automobile Brand Sales Management" should be revised to ensure that the automotive aftermarket services are competitive and free from competition.
Relevant laws and regulations urgently need to be introduced
In response to the support provided by the “Implementation Measures for Automobile Brand Sales Management†on the monopoly of car manufacturers at the legal level, the State Administration for Industry and Commerce issued the “Notice of the General Administration for Industry and Commerce on stopping the filing of the work of the general dealers of automobiles and authorized dealers of car brands†on August 1st. This move has broken the "car brand sales management implementation measures" on the auto dealer licensing requirements. The industry generally believes that with the continuous deepening of the anti-monopoly investigation, China will fully rectify the ways in which automobile manufacturers distribute and sell automobiles and auto parts.
In response to this, the EU-China Chamber of Commerce believes that while revamping the “Implementation Measures for Automobile Brand Sales Managementâ€, the direct or indirect restrictions exerted by automobile manufacturers on parts suppliers constitute a monopoly agreement or agreement that restricts free competition. It is also prohibited in the current "Anti-Monopoly Law." The Chinese government should implement a strict dissuasive law enforcement system and apply the relevant provisions of the "Anti-Monopoly Law" to ensure that the automotive aftermarket business is open to all equipment suppliers.
Regarding the actual role of the European Union Chamber of Commerce in China in giving advice on anti-monopoly investigation of cars, the industry has generally expressed that it needs to be observed. “The position of the European Union Chamber of Commerce in China on anti-monopoly of automobiles is of positive significance to breaking the monopoly of auto parts, and it also urgently requires the introduction of relevant laws and regulations. However, due to the fact that the existing laws and regulations have been implemented for many years, they are affected by relevant technical specifications and historical factors. Closely to the appeal of industry organizations, it is difficult to change the status quo in the short term, said Cui Dongshu, deputy secretary-general of the National Passenger Car Information Association.
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