(ECNS) -- Chinese ministries have negotiated with international carmakers on scraping restrictions on the supply of imported cars sold outside their authorized dealership networks, in the hope of eliminating the last barrier of parallel vehicle imports, National Business Daily reported.
The Ministry of Commerce is spearheading the effort with seven other ministries to encourage development of this sector.
With strong backing from the government, the parallel-import system allows more foreign cars to be imported to China without authorization from auto manufacturers, resulting in lower prices for local buyers.
But media reports say leading brands like BMW, Mercedes-Benz and Jaguar Land Rover all try to control the supply of parallel imported cars by raising emissions among cars intended for the Chinese market, making them more expensive due to higher sales taxation.
Some carmakers also trace vehicle identification numbers and prohibit overseas dealers from selling them to China.
An insider told the newspaper that authorities demanded they stop controlling the supply of parallel imported vehicles.
If carmakers refuse to comply, China will introduce measures that include a limit on licensing permits for car imports and adjustment of the benchmark sales tax, according to the insider.
Industry analysts say the number of cars sold in China through parallel imports will grow by 25 percent to 30 percent in the next five years.