Govt issues new regulation for auto sector

The General Administration of Quality Supervision, Inspection and Quarantine on Jan 15 issued regulation stipulating the automakers' responsibilities in the repair, replacement and refund of faulty private cars made and sold in China, said an article in the Beijing News. Excerpts:

The regulation, which will take effect on Oct 1, backs consumers' rights.

It took eight years to bring the new regulation to life. However, there are still many disputed points in it, though it is already a big step forward, and its actual enforceability still needs the test of time considering the difficulties in identification and loss determination for insurance and claim settlements.

Beyond doubt, the regulation is a compromise reached after a long-term battle among different parties. While protecting the consumers' legitimate rights, the regulation also advocates the interests of the auto industry. The alleged attempt to protect the industry may be related to the characteristics of China’s auto market: the legislators were caught in a dilemma between the need to strike a balance between State-owned automakers and ordinary consumers.

To sacrifice the consumers' interests to help domestic car companies is indeed conducive to their growth and development in the short term, but in the long run the spoiled industry will find it hard to compete globally.

As China has become the world's largest auto market, domestic car companies have also undergone dramatic changes in the past eight years. They should not only be qualified and responsible for more reasonable after-sales services, but also provide the rights consumers are supposed to enjoy.