Demystifying the "Monopoly" of imported cars

After China's accession to the WTO, a large influx of imported cars, in order to regulate the mainland automobile market, in 2005 introduced the "automotive industry policy" and "car brand sales implementation management measures." The regulations stipulate that the sales of imported vehicles need to be authorized by the manufacturers. After that, the import vehicle trading companies that have not obtained the authorization from the manufacturers of automobiles have all withdrawn from the primary market.

In order to be able to achieve price control, almost all imported car manufacturers have licensed the brand to wholly-owned or absolutely controlled sales companies in China, that is, the brand's total car dealers in China. As automakers and general distributors are actually “one family”, they have achieved monopoly and monopoly operation on the resources, channels and pricing of imported vehicles.

As the full control of the import vehicle operating chain, they set aside the most lucrative profits for themselves. The remaining small portion of the profits was left to the domestic companies that had switched from the original import car dealers to distributors. For these distributors, although the new regulations since 2005 have avoided a vicious price war and stabilized imported vehicle prices, due to the dominance of the general agent, the wholesale price for them has been added to the freight, management fees, and exchange rates. Risk costs and higher profit margins make the profits left to them shrink.

The previous research data released by the China Automobile Association also confirmed this point: For the final sales price of an imported car, production and transportation costs accounted for 40%, all kinds of taxes and fees accounted for an average of 20%, and the profits of the distributor dealers. Takes up 30%, while the profits of other distributors are only 5%.

Since the general agent controls the market price, it is often difficult for distributors to make price war promotions in order to cope with competition. "On the one hand, it is because there is not much profit space left for them. On the other hand, the general agent often sets a minimum sales limit in order to maintain the monopoly of the market. Once the secondary dealers break the bottom line, they will be severely punished." Zhang Min, president of Shanghai Waigaoqiao Automobile Market, said. Therefore, the average profit of foreign sales of an imported car in China is almost equal to 10 domestic cars.

The problem is not only the existence of implicit monopoly in the sales cycle, but also the comprehensive control of spare parts supply and after-sales maintenance and maintenance, resulting in abnormally high prices for accessories and maintenance of imported vehicles. Rao Da told reporters: "Imported car spare parts can only be sold in the 4S shop, the price has turned several times. Car repair paint in the ordinary garage as long as a few hundred dollars, to the 4S shop will be two or three thousand dollars; Mercedes-Benz 600 To do a maintenance is about 8000~12000 yuan, the content is a simple change of oil, three filters and other conventional items. Of which the profits are self-evident."

This implicit vertical monopoly is actually more terrible than the obvious horizontal monopoly. On the one hand because the former is more subtle than the latter, it is harder to be aware of it, and it is more difficult to investigate it. The more important point is that this monopolistic behavior will create a chain reaction in the industry. Although it is impossible to directly form a price alliance between different brands or enterprises, it will greatly reduce the competition among competitors, which is equivalent to a large extent to stifling the possibility of reducing the cost and price through competition among various auto manufacturers. . The formulation of the minimum sales limit also greatly weakens the internal competition among the dealers of the same car brand, which greatly reduces the power and possibility of dealers to reduce prices. Even dealers who do not comply with this rule will be rejected and revenged. . All the extra costs thus incurred can only be paid by domestic consumers.

Experts pointed out that in foreign countries, there are many dealers operating a car brand, and it is difficult to carry out price manipulation in full market competition. However, in the Chinese auto market, imported auto makers have obtained huge profits by abusing their market dominance, sharply raising product prices, and controlling spare parts sales, which has seriously infringed consumer rights. In the long run, no country has allowed or will allow foreign-imported cars to obtain such huge profits in the country.