Thousands of cars in import scheme shipped to Tianjin from Dubai

Eight thousand cars are being shipped to Tianjin Port in three ships from Dubai under a "parallel-import" scheme that allows auto dealers to purchase vehicles directly in foreign markets and then sell them to customers in China.

The prices of the cars, composed mainly of premium brands, are about 15 percent lower than the price at an automaker's authorized dealer.

The last shipment of 8,000 cars will arrive around June 21 and are expected to move the needle in the domestic market.

In May, retail car sales for the segment in China hit 10,830 units, up 18 percent year-on-year.

During the first five months of the year, Tianjin's imported cars under the parallel-import scheme hit 19,800 units. They have a total imported value of 7.47 billion yuan ($1.05 billion) and account for 60 percent of the country's total imported cars.

"The sales surge is partly due to the country's announcement that it would postpone the launch of another round of auto emission standards－a move tied to the ongoing COVID-19 pandemic－thereby helping move the previous inventory under the lower threshold of environmental protection standards," said Liu Changyu, president of the Pacific International Auto City Co Ltd, which is located in the Tianjin Port Free Trade Zone.

Other incentives aimed at boosting consumer spending and stimulating the market have also contributed to the surge, said Zhang Guangwang, vice-director of the Commerce and Investment Promotion Bureau under the Binhai New Area, Tianjin.

The total number of vehicles imported under the parallel-import scheme this month to the Tianjin Port Free Trade Zone will hit 10,000 units.

The cars were manufactured in the Middle East and shipped from Dubai.

Four government bodies, the Ministry of Ecology and Environment, the Ministry of Industry and Information Technology, the Ministry of Commerce, and the General Administration of Customs, announced on May 14 they would sustain the imported car sales under the national standards for six months and the deadline was postponed to Jan 1, 2021 from July 1 this year.

Liu noted that given this background, the company added 1,000 units in its order from its previous purchase plan because of the "unexpected enthusiasm from consumers after the latest policy was announced."

Many cities in different areas of China offer a subsidy ranging from 2,000-5,000 yuan for each consumer who buy new cars in the recent two months in a bid to cushion losses in retail car markets during the pandemic.

"The subsidy or consumer coupon incentives are driving a new round of sales, reflecting the fact the market will not be affected by the spread of the virus," said Zhang Tingting, general secretary of the Tianjin Dealers' Association of Parallel-Import Cars.

This year, Tianjin as China's top parallel-import car port is expected to sustain its market peak as its total whole-year import is expected to top around 120,000 units, market insiders forecast.

But they also noted that the sector still has some bottlenecks, including slow capital flow for some foreign companies as well as the constantly changing schedule of shipping companies because they are being affected by the pandemic.

"As such, the local free trade area is beefing up efforts to smooth the loading as well as facilitate the Customs services in a bid to speed up the pace of the cars to hit the market," said Tianjin Port Free Trade Zone commerce bureau director Bao Jian.