BEIJING, April 14 China will allow car dealers
to sell brands from multiple manufacturers under new rules that
go into effect on July 1, commerce ministry officials said on
Friday, aiming to boost vehicle retailers' competitiveness as
economic growth slows.
The rules, largely unchanged from a draft issued in January
2016, forbid manufacturers from signing deals that prevent the
dealers from selling other brands of cars or parts, among a wide
variety of protections for dealers and consumers.
"The rules break up the singular nature of brand licensing
in car sales, allowing for licensed and unlicensed sale methods
in parallel, to break up brand monopolies and ensure fair market
competition," Hu Jianping, a deputy supervisor in the Ministry
of Commerce's Department of Market System Development, said at a
The policy will also prevent manufacturers from imposing
stock and sales targets upon dealers without agreement, tactics
that many dealers have complained force them to bear the cost of
high inventories as the market slows.
BMW AG paid $820 million to Chinese dealers in
early 2015 over complaints of burdensome inventories, with
dealers for Hyundai Motor Co, Kia Motors Corp
and Audi AG following suit in demanding
compensation for similar issues.
(Reporting by Jake Spring; Editing by Christopher Cushing)