Fujian FTZ to allow parallel auto imports

( chinadaily.com.cn )

Updated: 2015-06-26

The Fujian (Pilot) Free Trade Zone (FTZ) has rolled out a long-awaited pilot scheme for "parallel imports" which is widely expected to bring down the prices of premium cars sold in the Chinese mainland.

"Parallel imports" refer to the practice of car dealers importing vehicles from foreign markets to China without the permission of the manufacturer or the authorized distributor.

According to details, qualified enterprises – those with at least one-year auto sales experience and 10-million-yuan registered capitals – can apply to participate in the scheme, which has been adopted in other FTZs in Shanghai and Tianjin.

The companies should also have a physical dealership that offers maintenance, services and auto parts selling, as well as good credit.

“Parallel imports” creates a new import method for domestic auto dealers as a car imported via the system is usually 10 to 20 percent cheaper than it is on the market, the Haixi Morning Post quoted an insider as saying.

The scheme is expected to impact the imported cars market, leading to fierce competition and lowering the overall price of imported cars, which is good news for customers, he said.

Yet, the majority of parallel imports are high-end cars usually costing more than 500,000 yuan ($80,550), a price affordable only to a small portion of people, he added.

A luxury car brought in via “parallel imports” in Xiamen, Fujian province. [Photo/sunnews.com]