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Hazel Yin, Ruohan Zhang, Feb 12, 2015
There was a significant overhaul of the automobile industry in China in 2014. In mid-September 2014, several foreign automobile manufacturers, as well as their authorized dealers, were fined by the local pricing authorities, the provincial counterparts of the National Development and Reform Commission, for violations of China’s Anti-Monopoly Law. Around the same time, some new rules and policies were published or being contemplated by the other government authorities, including the State Administration for Industry and Commerce, the Ministry of Transportation, and the Ministry of Commerce.
In fact, China’s antitrust authorities started to pay more attention to the automobile industry back in 2012, if not earlier, when the China Automobile Dealers Association carried out a review of industry commercial policies, spare parts supplies, and after-sales services upon the instruction of NDRC, one of the three antitrust authorities in China in charge of enforcement against price-related monopoly conduct.
This article explains the current distribution model in China’s automobile industry and how it originated. It then provides a summary of the recent legislation and policies in the industry that are aimed at solving potential antitrust issues. We also discuss areas of uncertainty within the Chinese legal framework and draw comparisons with EU practices.