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New Measures for Sales Management of Automobile Brands Will

Date:2016-08-23 18:37:45   Source:未知   Click:

From the second half of last year on, the news about the revision of Measures for the Implementation of Sales Management of Automobile Brands of China (referred to as Measures) has received wide public concern in the industry. Early in April this year, eight ministries and commissions, including the Ministry of Commerce and Department of Public Works jointly issued Comments on the Promotion of Automobile Consumption (referred to as Comments) in which the comment on revising Measures as soon as possible was written on a prominent position of Comments. It shows the Government’s great attention to this matter.
Recently, the reporter was informed by China Automobile Dealers Association (CADA) that: the revision of Measures lasted nearly a year has been basically completed, currently ministries and commissions are carrying out the final review on the revised draft, and the date of introduction can be expected soon.
Measures Reflects Three Main Policy Highlights
Shen Jinjun, executive vice president and secretary-general of CADA, told the reporter that: the newly revised Measures reflects three main policy highlights.
Firstly, it balances the relationship between dealers and suppliers, and change inequality into relative equality, through the restriction on the strong act of suppliers. For example, it expressly prohibits the irrational acts including overstock and tie-in sale strongly reflected by dealers. As soon as the above-mentioned acts are found, department of industry and commerce administration will apply corresponding sanctions against the suppliers. In addition, the revised Measures also stipulates that suppliers should not have too much interference in the shop building of dealers, especially they are prohibited from charging the dealer for shop building margin and designating construction units, materials, decorative materials, office facilities and general-purpose repair equipment for the shop building. Besides, automobile suppliers are not allowed to have mandatory provisions on the business model of the automobile brand dealers. Provisions on the operating period upon the initial authorization not less than 5 years and the inhibition of authorization cancellation under the bottom-out system in any form are also reflected in Measures.
Secondly, it establishes the industrial supervision mechanism. The Ministry of Commerce, the State Administration for Industry and Commerce and other competent departments have also formulated Technical Specifications for Management of Chief Dealers, Technical Specifications for Management of Licensed Brand Dealers and a licensing contract sample for the agreement between the chief dealer and licensed dealer, as supplements to Measures.

Song Tao, deputy director of Committee of Experts of CADA, introduced: Technical specifications are detailed in the stipulations on qualifications for the establishment of the chief dealer and licensed dealer and the contract sample is a reference for licensing contract for the agreement between the chief dealer and licensed dealer, in which it is specifically stipulated that no discriminatory articles against equity are allowed. After the official implementation of both stipulations, Ministry of Commerce and State Administration for Industry and Commerce will entrust automotive industrial associations and chambers of commerce to organize experts to evaluate the qualifications for the establishment of the chief automobile dealer and brand dealer, and at the same time review the contents of the licensing contract according to the contract sample. These evaluation and review comments will be regarded as references for the approval and filing of the chief dealer and licensed dealer.
Thirdly, it improves the mechanism for the withdrawal of suppliers and dealers. In the past, whether the dealers withdrew from the sales network actively or passively, they had to bear huge economic losses from the shop decoration, rent of the place and stock. The withdrawal of suppliers not only brought losses to dealers but also implicated the consumers. All these problems will be regulated in the revised Measures, to legally protect the rights and interests of three parties.
Measures Tries to Break the Exclusive Importing Right of Chief Imported Automobile Dealers
Song Tao said, "The newly revised Measures may have a great adjustment on the management of imported automobiles."
As a result of the implementation of Measures since 2005, imported automobile suppliers have fully controlled the supply, sales channels and after-sales service, which has caused an imbalance situation: suppliers have absolutely influential right to speak while dealers are comparatively very weak. In addition, as loopholes exist in the supervision of the imported automobile market, the imbalance in the relationship between suppliers and dealers has been particularly evident. Last year, an event in which numerous imported automobile brands including Lexus, Volvo and Hyundai had a class action again suppliers attracted great attention of relevant departments of the State.
Song Tao said, “An important purpose of the formulation of Measures is to make the chief deals established by foreign automobile manufacturers in China factory representatives responsible for consumers. In practice, reliable supply is ensured through the empowerment of the exclusive importing right to the chief dealer, which plays a positive role in regulating the market of automobile flow and protecting interests of consumers, however, objectively deprives domestic companies of the legitimate importing right. What’s more, in practice there is still an ambiguous division in the responsibilities of the chief dealer and dealer in terms of quality problems of the automobiles. And a lot of responsibilities are still borne by the dealer.”
"In Article VI of Measures, it is stipulated that: the network plan of the same automobile brand is generally formulated and implemented by one domestic company. In the discussion on the revision, it was suggested that the expression of “generally” and “one” should be deleted, to change the exclusivity of the chief dealer and fundamentally solve the imbalance of rights and responsibilities between chief dealer and licensed dealer."
Before the implementation of Measures, many dealers had the right to import automobiles, for example regional agents. However, after the establishment of the chief deal system, foreign manufacturers have set up wholly owned or holding chief dealers, which only supply automobiles to chief dealers. Thus, many dealers have lost the importing right.
Song Tao pointed out that, "The legitimate importing and exporting right is a part of companies’ independent management rights endowed by the law. Thus, among the revising comments on Measures, another policy highlight is that the exclusive importing right of the chief dealer may be broken down, namely under the premise of legitimate source of automotive product import, automobile brand dealers can get licensed brand automobiles not only from the chief dealer, but also directly from manufacturers. Accordingly it will create a free and fair competition environment for China’s imported automobile market."