China’s auto dealers are proposing that the government prohibit automakers from dictating the number of cars they sell and extend the duration of distribution contracts to stem losses in the industry.
The recommendations were made by the China Auto Dealers Chamber of Commerce in response to a request for feedback from the Commerce Ministry, which is reviewing industry rules that were first implemented in 2005. Two calls to the ministry’s press office weren’t answered, while the dealer group didn’t immediately return a call seeking comment.
“The existing rules are no longer suitable for today’s conditions, given the shift from a market where demand outstripped supply to one where there’s insufficient demand and an excess of capacity,” the group said in its submission to the ministry, a copy of which was obtained by Bloomberg News. “Weakening the manufacturers’ absolute hold over dealerships will restore balance and promote the healthy development of the industry.”