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Parallel imported vehicles sell well but still play a minor role

Source: China Business News | Date: Dec. 9

  • Since the beginning of 2015, the Chinese imported auto market has seen a significant drop in both supply and demand so that imported auto dealerships are facing soaring inventories and a huge loss.

  • Figures show that China imported 910,000 vehicles during the first 10 months of this year, a drop of 23.7% over a year earlier, and Jan.-Oct. imported vehicle sales were down 21.2%. The sales decline is largely due to a structural oversupply and the local production of top-selling imported models. One expert predicts that the imported auto market will see a 10-18% drop this year, and this trend will continue next year.

  • In contrast to the market situation, parallel imported vehicles sell very well in China, and are expected to contribute to more than 10% of China's total auto imports this year. During the first 10 months of this year, up to 92,000 vehicles were parallel imported, and the figure is expected to rise as a growing number of consumers have turned to buy more personalized parallel imported cars.

  • Parallel imported vehicles have an absolute advantage over normally imported ones in terms of price, but they will play a minor role in the imported auto market in a short period of time due to complicated procedures, inefficient after-sales service, and high maintenance costs.

  • One insider believes that it is imperative for parallel imported auto dealers to build an innovative business model, improve after-sales service, and offer good insurance service to seek greater development.