China cracks down on dealership price gouging for repairs, spare parts
China will require automakers to publish technical information on vehicle repair and spare parts beginning next year, a move aimed at curbing price gouging by car dealers.
On Thursday, the government announced plans to make repair manuals and spare part catalogs publicly available. This will make it easier for consumers and independent repair shops to fix cars, analysts said, putting pressure on car dealerships to cut repair prices.
"This is a countermeasure to try to make original dealership prices more affordable to the consumers," said Yale Zhang, Shanghai-based managing director at Automotive Foresight.
Such detailed information would make it easier for third-party repair shops to identify suppliers and source parts directly, Zhang added.
The new policy, announced in a joint statement from eight government ministries and departments, is the latest in a series of measures China began taking last year to crack down on price fixing in spare parts and repairs. The government has fined Daimler AG, Nissan Motor Co. and several other automakers.
The crackdown has put pressure on profits at a time when companies such as BMW AG are counting on aftersales to supplement slumping profits from new cars. Spare parts and repairs in China often can be several times more expensive than in other markets.
In the first eight months, auto sales in China were flat and could drop this year for the first time since the market took off in the late 1990s.
According to a J.D. Power and Associates survey published in July, per-customer aftersales revenue for luxury brands dipped to 3,480 yuan ($550) this year, down from 4,288 yuan in 2014. For mass-market brands, aftersales revenue fell to 1,558 yuan per customer this year, down from 1,710 yuan in 2014.
"This is a countermeasure to try to make original dealership prices more affordable to the consumers," said Yale Zhang, Shanghai-based managing director at Automotive Foresight.
Such detailed information would make it easier for third-party repair shops to identify suppliers and source parts directly, Zhang added.
The new policy, announced in a joint statement from eight government ministries and departments, is the latest in a series of measures China began taking last year to crack down on price fixing in spare parts and repairs. The government has fined Daimler AG, Nissan Motor Co. and several other automakers.
The crackdown has put pressure on profits at a time when companies such as BMW AG are counting on aftersales to supplement slumping profits from new cars. Spare parts and repairs in China often can be several times more expensive than in other markets.
In the first eight months, auto sales in China were flat and could drop this year for the first time since the market took off in the late 1990s.
According to a J.D. Power and Associates survey published in July, per-customer aftersales revenue for luxury brands dipped to 3,480 yuan ($550) this year, down from 4,288 yuan in 2014. For mass-market brands, aftersales revenue fell to 1,558 yuan per customer this year, down from 1,710 yuan in 2014.
