China 'accelerates' plan to boost market for parallel-import autos

CAAM estimated that auto sales this year will grow 3 percent from 2014, lower than the 7 percent growth rate that it expected at the beginning of this year.

Last year, total annual sales of parallel-import vehicles reportedly reached 100,000 units.

According to China Automobile Dealers Association, there were 1.42 million imported cars sold in 2014.

Auto industry insiders say competition with automakers and their authorized dealers, poor after-sales service and the increasing cost of foreign cars are creating the current lag in sales.

Difficult road ahead

An expert in parallel-import autos who asked not to be named, said it is getting more difficult to run a parallel-import auto business, adding that parallel-import cars are mainly being shipped from the United States, Europe and the Middle East.

Parallel-import dealers are under great pressure because of the increasing cost of getting cars overseas.

"The best-selling models of Land Rover in the United States are generally $20,000 to $50,000 more expensive than before," the expert said, "And most of them are bought by Chinese."

Another parallel-import expert who also did not want to be named, said international auto manufacturers can raise costs for independent dealers importing cars from overseas by adjusting the engines in models.

In China, the tax rate for imported automobiles is based on the engine displacement. The bigger the displacement, the higher the tax rate.

Li Jinyong, general manager of Pang Da Automobile Trade, said the parallel-import vehicle business also encounters problems with customs authorities and after-sales services.

"The opening of the parallel-import vehicle market is a trend and there still is a long way to go," Li said.