China's anti-monopoly law to take effect, car price cartel to break down
Friday, 1 August 2008
BEIJING, July 31 (Xinhua): The Anti-monopoly Law of China is scheduled to take effect on August 1.
In reaction, Shanghai Volkswagen is going to hold a meeting immediately on the following day at its Shanghai distribution center and discuss coping strategies for the company and the dealers.
According to insiders, this law will introduce two big changes to the car industry. First, the car price will go free and the original car price cartel will collapse. Secondly, the manufacturers' ban on non-local sale will lose effect.
In accordance with Article 14 Clause 2 of the Anti-monopoly Law, the business operators are not allowed to set the minimum price of commodities for resale to a third party.
Experts hold that this provision can protect fair market competition, but may also cause price fluctuation and thus harm customer loyalty to brands.
Su Hui, a car marker manager in Beijing, believes that the law can help break the unfair relationship between manufacturers and dealers and establish a healthy and fair market environment.
In reaction, Shanghai Volkswagen is going to hold a meeting immediately on the following day at its Shanghai distribution center and discuss coping strategies for the company and the dealers.
According to insiders, this law will introduce two big changes to the car industry. First, the car price will go free and the original car price cartel will collapse. Secondly, the manufacturers' ban on non-local sale will lose effect.
In accordance with Article 14 Clause 2 of the Anti-monopoly Law, the business operators are not allowed to set the minimum price of commodities for resale to a third party.
Experts hold that this provision can protect fair market competition, but may also cause price fluctuation and thus harm customer loyalty to brands.
Su Hui, a car marker manager in Beijing, believes that the law can help break the unfair relationship between manufacturers and dealers and establish a healthy and fair market environment.