Automobile industry policy will be clearly defined

The reporter recently obtained information from well-informed sources that the Ministry of Commerce is currently working on developing supporting measures to implement the new automobile industry development policy. These measures are expected to cover several key areas, including automobile trade policies, brand sales management guidelines, and regulations for the used car market. Notably, one of the proposed rules suggests a minimum distance of 4 kilometers between car dealerships. According to an insider, the Ministry recently held a meeting with leading figures in the automotive sector to discuss four key documents, including these new legal frameworks. During the meeting, there was significant debate over the proposed 4-kilometer rule, which many participants found controversial. Previously, the automobile brand sales management regulations required a minimum distance of 15 kilometers between dealers, but some manufacturers at the meeting argued that this limit should be reduced to around 4 kilometers. An automotive industry expert told reporters that car dealerships have traditionally operated under regional marketing models and should be encouraged and supported. However, if a manufacturer insists on opening a store within just 4 kilometers, it could lead to market saturation and create unnecessary competition. This, in turn, may not be beneficial for specialty stores that currently play a limited role in product marketing. The revised brand sales management approach has drawn considerable attention. It is also reported that the upcoming "Automobile Brand Sales Management Regulations" may include specific provisions on how domestic and imported vehicles will be handled under the new industry policy. The new rules could require motor vehicle operators to hold both brand agency rights and operating rights, rather than simply being authorized to sell vehicles. Additionally, each brand's agency must be an independent business entity. Yu Jianhua, deputy director of the Department of Commerce, previously stated in an interview that many industry stakeholders are concerned about the end of the current transition period and how China will manage vehicle imports after the elimination of quota permits. He emphasized that the process is ongoing and that the government will strictly adhere to its WTO commitments. "We will cancel all non-tariff measures according to the schedule," he said. "The basic principle of all management methods is to align with four key requirements: first, compliance with WTO regulations; second, alignment with China’s Foreign Trade Law; third, adaptation to China’s reality; and fourth, following common practices among other WTO members." Yu added that referencing the methods used by other WTO members to effectively manage imported automobiles and parts is likely to shape the future direction of China’s auto import market.

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