Lo­cals hunt for car bar­gains in FTZ

China Daily (Canada) - - FRONT PAGE - By SHI JING in Shang­hai shi­jing@chi­nadaily.com.cn

In­ter­est in the par­al­le­limport cars avail­able at the China (Shang­hai) Pi­lot Free Trade Zone is grow­ing af­ter the cen­tral gov­ern­ment au­tho­rized sales there last month.

Now lo­cal res­i­dents as well as peo­ple from neigh­bor­ing Jiangsu and Zhe­jiang prov­inces reg­u­larly pack the 3,000-square-me­ter trad­ing cen­ter in search of a bar­gain-priced for­eign car.

Seven­teen Chi­nese com­pa­nies be­gan sell­ing th­ese at the Shang­hai FTZ from Feb 10. Th­ese auto deal­ers must have been in busi­ness for at least five years, made a profit for three con­sec­u­tive years, and have sales of more than 400 mil­lion yuan ($64 mil­lion) in the past fi­nan­cial year.

Par­al­lel-im­port cars are bought di­rectly from over­seas to by­pass dis­trib­u­tors and 4S deal­er­ships so that sell­ers can off­load at dis­counts of 10 to 25 per­cent.

Zheng Yanghui has his eye on a Range Rover at the cen­ter. He said he has al­ready test-driven the same model at a 4S store in the city.

“The ser­vice level here isn’t great but it’s only been open for a month. It still needs time,” said the 43-year-old sign man­u­fac­turer.

“They have a re­pair shop set up and they are mov­ing quite fast. If I can save even a lit­tle bit on the price, it’s good enough for me.”

Zhang Xirong is a sales manager at the trad­ing cen­ter. She wasn’t able to close any deals dur­ing Chi­nese New Year be­cause the cars were only on dis­play that week, but she said busi­ness picked up as soon as the week­long hol­i­day ended.

Since the trad­ing cen­ter is the first of its kind in China and has only been run­ning for one month, some tweak­ing is still re­quired, es­pe­cially in terms of ser­vice.

Some con­sumers com­plain that there are too few sales reps, only a dozen or so ve­hi­cles on show, and that prices are not clearly dis­played.

More­over, the cars are usu­ally locked, mean­ing that con­sumers can­not take a look in­side. Go­ing for a test drive is usu­ally out of the ques­tion.

Du Jiehui left the cen­ter af­ter just 10 min­utes in late Fe­bru­ary. The 47-year-old re­al­tor is plan­ning to buy a Porsche Cayenne this year but was frus­trated upon learn­ing that the model be­ing sold in the FTZ is not avail­able at other 4S stores.

“There was no way to com­pare the 980,000-yuan price tag to see if it was a good deal,” he said.

“There was no in­for­ma­tion about main­te­nance costs and I would be solely re­liant on the re­pair cen­ter in­side the FTZ.”

He said luxury car buy­ers care more about af­ter-ser­vice than re­tail prices.

Chi­nese deal­ers of im­ported cars are fac­ing more chal­lenges this year, with in­ven­to­ries run­ning high due to drop-off in de­mand over the re­cently ended Spring Fes­ti­val, ac­cord­ing to the Fe­bru­ary Ve­hi­cle In­ven­tory Alert In­dex re­leased by the China Au­to­mo­bile Deal­ers As­so­ci­a­tion.

“The mar­ket share of im­ported cars has been fall­ing since the start of the year but in­ven­to­ries keep grow­ing,” said Wang Cun, a se­nior manager at China Au­to­mo­bile Trad­ing.

“De­mand be­gan shrink­ing in the fourth quar­ter, with Novem­ber the hard­est-hit month. As a re­sult, deal­ers slashed their prices by 10.7 per­cent on av­er­age in Jan­uary com­pared to a me­dian dis­count rate of just 6.8 per­cent in July,” he added.

“But the mar­ket barely re­acted to the cut-rate prices. We pre­dict it will take at least six months be­fore the im­ported car mar­ket picks up again.”

SHEN ZHENYU / FOR CHINA DAILY

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