China Begins Car Imports Through Shanghai FTZ

From Bloomberg in November: China Poised for Testing Parallel Car Imports in Shanghai

China said it will step up preparation of a trial program for parallel car imports in Shanghai’s free-trade zone, a move that could lead to lower prices for foreign brands in the world’s biggest vehicle market.

The government will adjust rules and speed up work on carrying out a direct-import test program in the zone, the State Council said in a statement dated Oct. 23, which was posted on the central government’s website today. The government didn’t say when the program will start.

Under the trial, cars would be brought into China without going through a brand’s distribution network, usually leading to lower prices. Cheaper parallel imports would pressure carmakers to cut their prices in the China, according to brokerage Sanford C. Bernstein.

The test is beginning and this Chinese article estimates that prices could fall by 20 percent. 上海自贸区启动平行进口汽车试点 进口车望便宜20%

Parallel imports of automobiles and the price difference between the 4S shop, depending on model, usually the higher the price, the greater the difference. Typically 15% -20% cheaper. Some have been relatively low price of imported cars, probably the difference in the 10%, or even less than 10%.

The article also has this table of car prices in China and overseas, which shows that some luxury brands sell for well over 100% markups in some cases.

The net effect of this policy is great news for Chinese consumers, but will give Chinese automakers pressure at a weak point.

Three more FTZs are due to launch in March: Guangdong, Fujian, Tianjin FTZs to Launch