China Might Amend the Branded Automobile Sales Regulations Due to Monopoly Concerns

On 31 July 2013, the State Administration for Industry and Commerce (“SAIC”) promulgated the Announcement on Stopping Recordal of Automobile General Distributors and Authorized Branded Automobile Dealers (“Announcement”). Starting from 20 August 2014, the SAIC will no longer accept any filing for recordal of authorized dealers of branded automobiles (including general distributors) and the implementation of the current recordal system of general distributor and dealers for branded automobiles will cease by then. For any new general distributors or authorized dealers, their business scope will be stated as “sales of automobiles” without mentioning the brand of the automobiles for sale. For the existing ones, they may also apply for changing their business scope from “sales of [brand name] automobiles” to “sales of automobiles”. The Announcement also emphasizes that the SAIC will strengthen its administration and supervision of the operational activities in the automobile industry, protect the lawful rights of consumers and maintain a market with fair competition. 
The Announcement is interpreted by the market as a signal that the Chinese government will soon overhaul the Implementation Measures for the Administration of Sales of Branded Automobile (the “Branded Automobile Sales Measures”) in order to address increasing monopoly concerns in the Chinese automotive industry.

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