China is now planning to give foreign luxury car makers such as Audi, BMW and Mercedes-Benz more competition by allowing unauthorized dealers to see imported cars. Allowing these "parallel importers" is China's move to control the prices of high-end cars.
Beijing has announced a pilot scheme that would legalize parallel imports that would be launched at Shanghai's free trade zone next week. This pilot scheme would just be one of the several measures by China to bring down prices of luxury cars often sold much more higher in the country.
Aside from the high prices, weakening sales growth, tensions with dealers as well as corruption cases such as the latest price-fixing probe, made China more anxious to regulate the market.
According to a lawyer who was a participant at a private seminar last year, officials at the Ministry of Commerce and the National Development and Reform Commission planned this strategy to make high-end imported cars cheaper.
"Legalizing parallel imports is part of a broad anti-monopoly campaign by the government to improve market order and bring down prices of imported cars," he shared anonymously.
Ever since the scheme has been announced, already more than 20 dealers have applied to be part of it. These dealers are said to have the ability to sell imported luxury models that are at least 10-percent cheaper than those being sold by the authorized channels.
Once launched, the scheme may have the ability to break the monopoly of these authorized luxury car sellers and foster healthy competition, which would benefit consumers ultimately.