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The role of auto trade policy has yet to be refined despite its introduction

2016-06-13


This Policy is necessary to determine the direction of the development of the automobile trade, however, how it will be implemented and how it will affect the existing market is yet to be determined after the introduction of the various implementation rules.

    On August 10, 2005, after more than two years of deliberation and nearly a year of consultation, the Automotive Trade Policy (hereinafter referred to as the "Policy") was approved by the Ministry of Commerce's Ministerial Committee and released, and came into effect on August 12. The full text of the Policy was published on the Ministry's website.

    The official promulgation of the Policy is divided into general provisions, policy objectives, auto sales, used car circulation, auto parts circulation, auto scrapping and scrap car recycling, auto foreign trade, and a total of 8 chapters and 49 articles, which is China's industry policy regulating the whole process of auto factory to scrap disposal circulation.

    However, unlike last year's draft of the Policy, which triggered a great deal of discussion within the industry, among the public and on the internet, the formal introduction of the Policy was met with a fairly consistent response from all walks of life - calm. Perhaps it is because the nearly year-long discussion process and the early implementation of the "Auto Brand Management Measures" have made everyone's thinking more objective and rational. The majority of the scholars and experts interviewed by the reporter on this issue believe that the provisions of the Policy only provide a direction for the development of the automotive trade, as to how the specific implementation, how to affect the existing market, but also to be determined after the introduction of the implementation details.

    The policy is clearly framework and oriented

    There is no doubt that the formal introduction of the Automotive Trade Policy is necessary to determine the direction of the development of the automotive trade.

    The general provisions of the Policy clearly state that the purpose of this policy is to "establish a unified, open, competitive and orderly automobile market, safeguard the legitimate rights and interests of automobile consumers, promote the healthy development of China's automobile industry, promote consumption and expand domestic demand".     In fact, due to the long-standing traditional thinking of production over distribution, China's automobile marketing services are very backward, and the automobile distribution industry, including new and used car trading, is in a weak position. With the rapid development of China's automotive industry, the imbalance between the speed of the consumer market and the lagging marketing and service sector is becoming more and more prominent, bringing difficulties to further enhance the quality of services to consumers. The Policy is a timely and comprehensive approach to regulate its development.

    The formal introduction of the Policy is a timely expression of its good intentions to regulate and promote the development of the automobile trade.

    The relevant person in charge of the Ministry of Commerce said that, on the one hand, the Policy focuses on regulating the order of market entities, establishing and improving the access system; on the other hand, it regulates the order of market transactions, strictly prohibits low price bidding, price fraud, tax evasion, forced buying and selling, as well as illegal acts of operating counterfeit and shoddy auto parts, safeguards public and public interests, protects the legitimate rights and interests of consumers, and guides trade enterprises to operate honestly and legally. In addition, it will further introduce a competition mechanism to expand the scope of the trade. In addition, it will further introduce a competition mechanism, expand the opening up of the country to the outside world, break the regional blockade and promote the free circulation of automotive goods throughout the country.

    However, if one carefully reads the various provisions of the Policy, it is easy to see that the Policy is more like a directional, rough framework, with no detailed explanation of specific issues, operating principles, conditions and other details, and no specific laws throughout, more of a passing sentence. "In fact, the direction of the policy is certainly important, and for car manufacturers as well as consumers, with operability of the model, methods, means and other details is what we are concerned about, which is why this "policy" officially introduced but all parties react calmly a reason." A familiar with the "auto trade policy" from the conception to the introduction of the whole process of industry sources said.

    Used car trading threshold lowered

    The company's main business is to promote the development of the company's products and services.

    In addition to reaffirming the current management of car brand sales services and automatic import permits, the policy further relaxes the restrictions on used car trading, encourages strong foreign investment in auto trade, and encourages the accelerated development and expansion of auto consumer credit. Compared to the draft issued last year, the official document removes the provision that "used car trading markets shall not directly engage in used car business activities", which means that the direct business function of many used car trading markets can continue. The official policy also removes the requirement that "personnel engaged in used car appraisal and evaluation activities pass a unified grade examination" and "obtain the relevant professional qualification certificate". In addition, the threshold for foreigners to enter the used car sector has also been lowered.

    "China's used car market is a fairly large market, and once the trade is active, it will not only drive the development of the related appraisal and evaluation industry, but will also stimulate the sales of new cars, thus driving the development of the entire Chinese auto industry." Jia Xinguang, an analyst at China Automotive Industry Consulting and Development Corporation, said in an interview with reporters.

    The company's main business is to promote the development of the new car market. The market not only effectively promotes the circulation of used cars, but also relieves new car consumption of its worries and helps to promote new car consumption.

    The lowering of the threshold for used car transactions in this fledgling situation will undoubtedly boost the speed of used car circulation, so will encouraging foreigners to enter the used car sector have a negative impact on the still immature Chinese used car market?

    The company's main goal is to provide the best possible service to its customers.

    Of course, there are also different voices. The company's main business is to provide a wide range of products and services to the market.

    "But the introduction of the policy has objectively established a fair, just and equal competitive environment, and with this environment it accepts competition from international sources." Wang Ruolan said.

    Refinement to work

    Perhaps it is because the introduction of the Policy is more of a guiding clause, and there are no specific implementation details, so the industry is divided on its specific implementation effect and its substantive role. Jia Xinguang believes that the Automotive Trade Policy itself will not have a significant impact on the industry. "The policy mainly covers brand sales, used car business and import and export policies, and in fact there are already separate policy provisions in these areas, or the main content of the policy is already known to the industry. The Ministry of Commerce's intention may be to introduce a programmatic policy covering all aspects of the automotive business."

    Another analyst also believes that if the principle provisions in the Automotive Trade Policy are not explained clearly in time, it will not work as it should. "There are specific provisions to implement what is in principle." The source said.

    The company's main goal is to provide the best possible service to its customers, and to provide the best possible service to its customers. "The establishment of a chain of branches this article in the Policy only mentioned a sentence, in the Measures also did not have a specific embodiment, without a specific implementable, operational approach, the implementation will easily seem hollow."

    The actual "policy" also points out that there is an omission in the current "policy" on the marketing of used cars, "in fact, there is a financial marketing method, the car manufacturers can buy back the sold cars, the money can be used as payment for the purchase of new cars, which is also a marketing method, but in the "policy" as well as the "methods" are not reflected in this piece, so I think the "policy" and "methods have yet to be improved in light of the actual situation."

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