The pricing practices of both automobile manufacturers and dealerships will be further regulated.
On December 12, the State Administration for Market Regulation (hereinafter referred to as "SAMR") publicly solicited opinions on the "Guidelines for Compliance of Pricing Behavior in the Automobile Industry (Draft for Comment)" (hereinafter referred to as "Draft for Comment").
According to the latest data from the China Association of Automobile Manufacturers, automobile sales reached 31.127 million units from January to November this year, a year-on-year increase of 11.4%, firmly establishing itself above the 30 million unit mark. However, while acknowledging these achievements, some problems in the automotive industry cannot be ignored, especially the need for further regulation of various irrational competitive practices.
The State Administration for Market Regulation pointed out that in recent years, with the rapid development of the automobile market, especially the new energy vehicle market, new business models have emerged continuously, and pricing behavior has become increasingly complex. In practice, there are problems such as irregular price labeling, price fraud, price collusion, and irrational competition in the automobile production and sales sector, which seriously disrupt market order, infringe upon the legitimate rights and interests of consumers and businesses, and are detrimental to the high-quality development of the automobile industry.
The draft for public comment provides clear, specific, and comprehensive guidance and suggestions for automobile manufacturers and sellers. The China Association of Automobile Manufacturers stated that the draft effectively helps companies avoid potential legal and regulatory risks and promotes legal and compliant operations at the source.
Specifically, for automobile manufacturers, the draft for comments clarifies the price compliance requirements at all stages, from vehicle manufacturing to parts production, and from pricing strategies to sales practices. These requirements mainly include:
First, implement full-process price management, requiring the establishment of a price management system covering the entire chain of vehicle sales, financial services, and other aspects.
Second, it regulates promotional and pricing practices, requiring rebate policies to be clear and explicitly stipulated in contracts or other forms , and respecting the dealers' right to set their own prices.
Third, we will crack down on unfair pricing practices in accordance with the law, including price collusion between automobile manufacturers and auto parts manufacturers; automobile manufacturers, in addition to legally reducing prices to deal with stockpiled goods, may also lower their actual ex-factory prices below their production costs in order to squeeze out competitors or monopolize the market .
Fourth, standardize the pricing of spare parts and functions, and clarify that the free period and pricing standards for "paid unlocking" functions must be disclosed to protect consumers' right to know.
For car dealerships, the draft for comments also clarifies pricing behavior requirements. Focusing on the new car sales process, it aims to regulate prominent issues such as failure to clearly display prices as required and false promotions. These mainly include:
First, the rules for clearly marked prices have been refined, requiring business premises and online platforms to truthfully and accurately display information about goods and services, strictly distinguish between the price of automobile products and the price of sales services, and strictly prohibiting additional charges .
Second, it regulates promotional activities, requiring the prominent public display of promotional rules, duration, and restrictions, and accurate information on gifts.
Third, the forms of price fraud are specified, and behaviors such as misleading pricing, false price comparisons, and failure to fulfill price commitments are explicitly prohibited.
Fourth, establish a risk warning mechanism to encourage third-party platform operators of automobile trading networks to provide two-way warnings about operational and consumer risks associated with significantly low-price transactions .
Fifth, it clarifies that, apart from legally reducing prices to dispose of stockpiled goods, car sales companies that lower actual sales prices below cost of goods in order to squeeze out competitors or monopolize the market face significant legal risks.
Furthermore, the draft for comments also guides the establishment and improvement of internal compliance management systems. It encourages enterprises to establish internal price compliance management mechanisms and stipulates six core mechanisms, including mechanisms for price decision-making, sales contract management, internal supervision, price emergency response, risk prevention and control, and price compliance training, to achieve full-process control of pricing behavior.
The China Association of Automobile Manufacturers believes that legality and compliance are the bottom line that enterprises must adhere to in their operations. Automobile manufacturers and sellers should establish sound internal price compliance management mechanisms, actively conduct price risk identification and early warning, and consciously regulate irrational competition. This will not only effectively prevent companies from suffering brand damage and customer loss due to price violations, helping them establish a good image of honest operation, but also enhance consumer trust in the company's brand. While protecting consumer rights, it will also encourage automobile manufacturers to focus on brand, product, and service, thereby maintaining a fair competitive environment and promoting the healthy development of the industry.
Following the release of the draft guidelines, automakers such as BYD, BAIC Group, and XPeng Motors responded swiftly, stating that they would use the guidelines as a guide to continuously optimize their price management and compliance systems. At the same time, all the aforementioned automakers pledged to strictly implement the requirements for regulating price competition, protect consumer interests, and resolutely eliminate any form of price fraud and unfair competition.
Furthermore, it is worth mentioning that the State Council executive meeting held on July 16th explicitly stated that, with a view to promoting the high-quality development of the new energy vehicle industry, and in response to various irrational competition phenomena emerging in this sector, a comprehensive approach combining short-term and long-term measures should be adopted to effectively regulate the competitive order of the new energy vehicle industry. The meeting specifically emphasized the need to strengthen cost investigations and price monitoring.