Huang Jianguo: JV with automaker to win

【Editor's Note】 Signing of the vehicle brand dealers authorization contract, involves benefit of manufacturers, distributors and consumers. Some terms are strong factory-based and have been criticized for violating legitimate rights and interests of dealers. The draft "Brand Dealers Authorization Contract" developed by the State Administration of Commerce and Industry, Ministry of Commerce and China Automobile Dealers Association, was interrupted by strong resistance of auto manufacturers in July this year.

2010 authorization contract will be signed soon, whether the one-sided terms of the manufacturers can be terminated, whether rights of the vehicle dealers can be safeguarded earns widespread concern. Sohu Auto made an exclusive interview on this issue with Huang Jianguo, chairman of Jianguo Auto, investigating opinion of the dealers on this opinion.

Sohu Auto: We are wandering whether there are similarly illegal or unreasonable terms in all these brand dealer authorization contracts?

Huang Jianguo: In my opinion this asymmetric economic model is caused by the rapid economic development and the imbalance in the automobile industry. There are problems, but with a further shortage of land resources and automotive supply and demand contradiction progressively balanced, as well as national macroeconomic environment and the improvement of economic contracts and regulations, distributors and manufacturers will ultimately cooperate in gradually rational, equitable, and win-win manner, then they can achieve a economic co-operation model that relatively satisfied both parties, and even multi-party. The emergence of higher-level economic cooperation like joint-stock companies, equity participation and others can also be expected.

Sohu Auto: Does such big group car dealer like Jianguo have nothing to do with these one-side terms?

Huang Jianguo: Jianguo has focus on automotive sales and service for a long time, we made our work on all aspects of the automotive sales and service painstaking, precise and thorough, focusing on improvement of the ability on integrating our own resources, focusing on training, maintaining, and enlarging the influence of our own brand as a way to offset these factors which are against to business operations.

Sohu Auto: Two years ago, government began to revise ‘Automobile Brand Sales Management Regulations’; last year standard text of the contract are systematically extended, circulation industry have hated the one-sided contract provisions, why there are still so many one-sided contract provisions?

Huang Jianguo: On markets, economic environment, development planning, the research of the relevant functional departments of the government is not deep enough, and these departments has a limited influence in the industry. The development of the automotive market is so well in recent years, Jianguo hold the sprits that always do their own thing, grasping all the opportunities and motives in the developing process of the enterprises, do practical things with full heart and power, after all, development is of overriding importance.

Sohu Auto: Such kind of one-sided terms will case what kind of loss?

Huang Jianguo: One-sided terms are detrimental to the long-term planning and development of distributors. They can impact the risk-resisting ability of enterprises and they are negative on firmly establish the confidence of the enterprises.

Sohu Auto: can the relationship between manufacturers and the distributors be improved? What is the premise?

Huang Jianguo: The premise, timing and pace of improvement of relations between the manufacturers and the distributors will ultimately determined by the change of the market environment. When the whole world-people have a strong awareness of resource conservation, environmental awareness, when the Chinese automobile industry meet and exceed the developed countries of the world, when the vehicle supply and demand achieve the modern industrialization level on plan, production and sales, the relation of manufactures and distributors may be on equal and normalized standard.（Translator: Qinghua-Xiewen）

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