Government will ease restrictions to allow China's car dealers to clear inventory.
Quick, send new models! Image: Toyotabloggers |
Despite a boost in sales after a tax incentive on small engine cars was introduced last year, China's dealerships are facing growing inventories as restrictions continue to impede sales.
In Beijing, the government is proposing to relax restrictions on car dealers so they will be able to distribute vehicles from multiple carmakers and resell stock to each other.
The move is aimed at stimulating a significant increase in car sales and more freedom for dealerships. Currently, carmakers impose strict sales quotas on dealers, forcing them to include unpopular models on their inventory that they are then unable to sell. The new guidelines would allow dealers to respond more quickly to shifting consumer tastes.
The latest regulations will also have an impact on smaller brands, allowing them to sell through a wider array of dealerships instead of relying on their own networks. Currently, dealers can only sell cars after receiving explicit authorisation from the carmaker.