China's authorities have announced that stricter measures will be introduced to regulate automakers' pricing behavior, including strictly prohibiting extra charges outside of listed prices and explicitly banning misleading price labeling.
On Friday, December 12, the State Administration for Market Regulation of China issued an announcement: To regulate pricing behavior in the automotive industry, the SAMR has drafted the "Compliance Guidelines for Automobile Industry Pricing Behavior (Draft for Comments)" (hereinafter referred to as the "Guidelines") and is now soliciting public opinion.
According to reports from National Business Daily and The Paper, the SAMR pointed out that in recent years, with the rapid development of the automobile market—especially the new energy vehicle sector—new business models are constantly emerging, and pricing behaviors are becoming increasingly complex. In practice, the automobile production and sales sectors face issues such as irregular price labeling, price fraud, price collusion, and irrational competition, which seriously disrupt market order, infringe on the legitimate rights and interests of consumers and operators, and are detrimental to the high-quality development of the automotive industry.
It is reported that the "Guidelines" consists of 5 chapters and 28 articles, detailing regulations for automakers' pricing behavior and clarifying compliance requirements for every stage, from whole vehicle to parts production, and from pricing strategies to sales behaviors.
It is reported that the "Guidelines" consists of 5 chapters and 28 articles, detailing regulations for automakers' pricing behavior and clarifying compliance requirements for every stage, from whole vehicle to parts production, and from pricing strategies to sales behaviors.
Main contents include: strictly distinguishing between vehicle product prices and sales service prices and strictly forbidding extra charges outside of listed prices; explicitly prohibiting misleading price labeling, false comparative pricing, and failure to fulfill price commitments; strictly banning charges without service, repeated charges, or passing on charges; stipulating that, except for legally discounting clearance items, if an auto sales enterprise sells at a price below purchase cost with the intent of driving out competitors or monopolizing the market, there are significant legal risks.
On Friday, the China Association of Automobile Manufacturers published an interpretation of the "Guidelines" on its official website, stating that the "Guidelines" are based on the "Price Law of the People's Republic of China", "Administrative Penalties for Price Violations", and other laws and regulations. The Guidelines provide clear, specific, and comprehensive guidance and tips for automobile manufacturers and sales companies to help them avoid legal red lines in business activities, effectively help companies avoid potential legal and regulatory risks, and promote truly legal and compliant operations at the source, thereby facilitating high-standard corporate governance.