Boosting Car Sales

China’s plan to expand its pilot parallel import program in free trade zones (FTZS) will offer customers more choices and further open up its automotive industry, reported on December 3.

The State Council, China’s cabinet, announced in November that all of China’s 12 FTZS will be allowed to pilot the parallel import program. Furthermore, the FTZS are encouraged to offer bonded storage for such imports, according to the newspaper.

Unlike traditional car importing, the program does not require auto dealers to import strictly from carmakers, thus the vehicles involved will be new to the Chinese market, providing more choices for customers.

Started in Shanghai in 2015 and expanded to some other FTZS since, the program is a key measure of the ongoing supply-side reform in the automotive industry, said Chen Zhenchong, an official from the General Administration of Customs. It also helps facilitate car sales in China and increase the number of imports, Chen added.

In the first three quarters of the year, 95,871 vehicles were imported to China under the program, up 5.9 percent year on year, data from the administration showed.

To promote the program, China has announced plans to scrap time limits on parallel vehicles’ bonded storage in FTZS. The move will allow importers to have a more flexible sales plan, without worrying about paying taxes on the vehicles before they are sold.