(Yicai Global) June 7 -- Established in April, the China (Chongqing) Pilot Free Trade Zone (FTZ) is striving to become a trial region for parallel imports of cars this year and hopes to use these as an avenue to develop new rules for international railroad supply chain finance.
Chongqing is applying to become a pilot city for parallel imports of cars and is expected to receive approvals this year, Liu Chang, who is responsible for Chongqing Railway Port Logistics Opening Co.'s car import business, told Yicai Global.
Once approved, Chongqing will roll out new policies for parallel imports of cars such as deferred tax payments and bonded exhibitions.
"In pilot cities, importers of parallel imported cars will be allowed to defer tax payments for three months and can stage bonded exhibitions," Liu said, adding that Chongqing applying to become a pilot city matters a lot to parallel import dealers.
By relying on the Chongqing-Xinjiang-Europe International Railway, Chongqing has attracted 25 parallel import dealers into its imported car port and encourages them to create new channels to purchase cars from overseas sources and expand such purchases.
Parallel import of cars refers to autos directly imported from overseas markets to China via professional channels. They are 'parallel' to cars imported via traditional channels and sold at official dealers' 4S (sales, spare parts, service, survey) stores authorized by branded carmakers. Without involving dealers' 4S stores, prices of parallel imported cars are as much as 10 to 20 percent lower than those sold through traditional channels.
Free trade zones in Shanghai, Tianjin, Guangdong and Fujian have all launched pilot parallel import schemes. Last year, the Ministry of Commerce also approved Sichuan, Xinjiang, Dalian and Ningbo to engage in parallel imports of cars.