Experts: New laws to protect consumers having an impact

Despite some bumps in the road, China's sweeping new auto warranty and consumer protection laws that took effect last year are having an impact in the world's largest and still-maturing auto market, according to industry data and experts.

The latest statistics from the General Administration of Quality Supervision, Inspection and Quarantine show automakers made a record 134 recalls of 5.3 million vehicles in 2013, an increase of 65.8 percent from 2012.

Foreign brands again led the way in the number of recalls, but seven domestic carmakers did recall a combined 450,000 vehicles, an increase of 36 percent over 2012.

Experts said that the increasing number of recalls is the result of a regulation governing defective vehicles that took effect on Jan 1 last year.

"The recall regulation has led to increasing transparency in product quality," said Qiu Baochang, director of the Beijing-headquartered Huijia Law Firm.

"For example, the 24th item of the regulation says companies that conceal defects can be fined of up to 10 percent of the value of all vehicles in an (eventual) recall.

"This means that a company could pay up to hundreds of million yuan for a violation," Qiu said. Bolstering the law is a separate new regulation to protect auto consumer rights that took effect last October.

It mandates that dealers repair or replace defective vehicles during the warranty period and carries heavy penalties for violations.

In cases of proven fraud, dealers could be required to refund the price of the car and give a new vehicle entirely free of cost to the victim.

But implementation has not been entirely smooth and consumer expectations at times unrealistic in an auto culture that is still young.

The website www.cheshi.com carried the story of a female customer surnamed Jiang in Laiyang, Shandong province who said she bought a new car for more than 400,000 yuan after the consumer rights regulation took effect. She later found that the front bumper had been repainted.

Fearing it might be a refurbished second-hand car, Jiang returned it to the dealership for a refund, demanding her money back and a new car for free as compensation.

The dealership agreed to the refund but refused to pay a penalty.