Chung Shi:no equal footing without Laws

【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. We made an exclusive interview on this issue with Sohu Auto commentator, senior analyst of Chinese auto industry: Mr. Chung Shi.

In Chung’s opinion, there has been widespread inequality in the authorization contract between manufacturers and dealers, "authorization contracts are signed every year, this time was too short, period of the contract itself is a problem, because as dealers’ speaking, the cost of fitting is a great investment, so as their pressure and psychological burden. "As for the specific content of the contract, dealers basically have no right of speaking," Most contracts are set up by manufacturers, and then the dealers sign it without discussing and consulting with manufacturers. However, as the cooperation agreement, the contract should be discussed by the two sides who sign this contract. Now the unequal status between the manufacturers and the dealers leave no room for bargaining. "

How can we establish a relative equal dialogue between the manufacturers and the dealers? This is a proposal which was set every year but cannot been solved. Chung Shi believes that there must be government intervention and promotion of regulations, or it is impossible to create effective constraints to limit the manufacturers. "Speaking from the process, there should first be laws which are standard, but our current situation is that a sudden introduction of laws and regulations may be difficult because the law required a review of the people's congress. Then at least, the corresponding authorities should put promissory regulations, the "Auto Brand Sales Management Implementation Method" has too many problems, while a modified version is delayed to be introduced yet, and now we are in a state without laws, how could we establish an equal dialogue mechanism? "

Chung Shi also pointed out that in United States, it took twenty or thirty years of the run-time for auto manufacturers and dealers to get a relatively calm relationship, it is indeed a slow gradual process, but we also must notice the annual growth rate of Chinese automotive market which has been 5 times or 10 times of their growth, "so we must step up the pace of dealing with this issue, and also from a realistic contradictions and differences it is the time to solve this problem." Chung Shi also suggest that the relevant government departments should set this issue on the agenda, for Stability of the automotive distribution industry is so important in promoting the development of the automobile industry.（Translator: Qinghua-Xiewen）

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