New Administrative Measures For Automobile Sales: To Forge A Better Relationship Between Manufacturers And Distributors

After a lapse of twelve years, the Ministry of Commerce ("MOFCOM") has amended their 2005 Automobile Brand Sales Management Implementation Measures ("2005 Brand Measures") to reshape the relationship between vehicle manufacturers and distributors. Rapid growth in China's automobile industry for over a decade has seen that the brand licensing-based business model once dominant under the 2005 Brand Measures becomes increasingly unsuccessful.

This brand licensing business model previously contributed to a substantial increase in production and sales; however, in recent years there has been a gradual slowdown in the growth rate of China's automobile sales. This slowdown, coupled with a large increase in car brands, as well as the rise of independent distributors willing to participate independently in the market called for amendments to the 2005 Brand Measures by taking into account the factors Such as the increasingly tense relationship between manufacturers and