An­titrust rules for auto sec­tor soon

China Daily (Canada) - - FRONT PAGE - By LAN LAN lan­lan@chi­nadaily.com.cn

China’s anti-mo­nop­oly reg­u­la­tor has started the draft­ing of an­titrust guide­lines for the au­to­mo­bile in­dus­try, which are likely to in­volve is­sues emerg­ing from online sales and par­al­lel car im­ports.

A first draft is ex­pected for public con­sul­ta­tion by the end of the year with a fi­nal ver­sion to be pub­lished by the anti-mo­nop­oly com­mis­sion un­der the State Coun­cil “in due course”, sources close to the process told China Daily.

The Na­tional De­vel­op­ment and Re­form Com­mis­sion sent out its first round of ques­tion­naires which form the ba­sis for the guide­lines in early July, to au­tomak­ers, sup­pli­ers, deal­ers, ser­vice providers and trade as­so­ci­a­tions.

Ac­cord­ing to an of­fi­cial with the NDRC’s price su­per­vi­sion and anti-mo­nop­oly bureau, fur­ther ques­tion­naires are ex­pected in com­ing months, with more in­ter­ested par­ties be­ing in­vited to give feed­back to en­sure com­plete open­ness and trans­parency.

The guide­lines will cover an­titrust is­sues re­lated to auto and parts sup­ply, ve­hi­cle dis­tri­bu­tion and af­ter-sales ser­vices, as well as those aris­ing from new busi­ness for­mats such as off­line-to-online and par­al­lel im­ports.

Jes­sica Su, a mem­ber of the draft­ing team and a scholar at the Chi­nese Academy of So­cial Sciences, said the guide­lines will help clar­ify how China’s an­titrust reg­u­la­tor deals with main­tain­ing re­sale prices, ter­ri­to­rial re­stric­tions, and ex­clu­sive sup­ply and pur­chase.

Around 50 rep­re­sen­ta­tives from do­mes­tic and in­ter­na­tional au­tomak­ers, sup­pli­ers, deal­ers and lawyers par­tic­i­pated in a pol­icy meet­ing hosted by theNDRCon Fri­day.

Some of those in­volved said they still felt con­fused, how­ever, over var­i­ous as­pects of the cur­rent anti-mo­nop­oly laws.

One rep­re­sen­ta­tive of a Ger­man­lux­u­rycar­maker said half of its more than 400 deal­ers in China were find­ing it hard to make profit amid dif­fi­cult mar­ket con­di­tions with­out be­ing of­fered ex­tra sub­si­dies. Un­der such cir­cum­stances, it is dif­fi­cult to to­tally re­lax con­trol over deal­ers.

Deng Zhisong, an an­titrust at­tor­ney with Bei­jing-based Dacheng Law Of­fice, said the old model for car and parts sales should be changed and many be­lieve au­tomak­ers should stop sub­si­diz­ing deal­er­ships.

Some au­tomak­ers said they were also con­cerned about in­tro­duc­ing a more re­laxed sys­tem for af­ter-sales ser­vic­ing. Pre­vi­ously, au­tomak­ers have only dis­trib­uted branded re­place­ment parts through au­tho­rized net­works.

A rep­re­sen­ta­tive from one in­ter­na­tional sup­plier said the de­vel­op­ment of key com­po­nents is in­vested by the sup­pli­ers, while the au­tomak­ers only do some fol­low up de­vel­op­ment such as adding a con­nec­tor or chang­ing the size ac­cord­ingly, but au­tomak­ers don’t per­mit to sell the parts af­ter-sales mar­ket.

Deng said the gov­ern­ment had a duty to en­sure the se­cu­rity of com­po­nents in the af­ter-sales mar­ket, but it needs more in­volve­ment from other gov­ern­ment author­i­ties such as the Min­istry of Com­merce. The guide­lines’ fo­cus should be en­sur­ing fair com­pe­ti­tion.

The NDRC of­fi­cially started draft­ing the new rules in May, based on ex­pe­ri­ences gained from en­force­ment ac­tiv­i­ties, in­clud­ing com­pe­ti­tion penal­ties against com­pa­nies in­clud­ing Audi AG, Chrysler Group LLCandMercedes-Benz.

Its re­search into an­titrust is­sues sur­round­ing the auto in­dus­try started as early as 2012.

Mean­while, in­dus­try sources said the NDRC’s an­titrust probe into Nissan Mo­tor Corp’s joint ven­ture with Dongfeng Mo­tor Corp has en­tered the fi­nal stages, with penal­ties likely to be an­nounced soon. sup­pli­ers to the

SHI YAN/FOR CHINA DAILY

A Mercedes-Benz Smart model on dis­play at an auto show in Haikou, cap­i­tal of Hainan province, in March. The anti-mo­nop­oly reg­u­la­tor has started the draft­ing of an­titrust guide­lines for the au­to­mo­bile in­dus­try.

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