Parts are not sold Shanghai Monopoly accessories sales

In the current downturn of the automotive market, sales at Shanghai GM's 4S stores remain strong. Despite this, there is growing concern among consumers about the company’s strict control over spare parts. For instance, while it is possible to purchase Jetta, Beverly, and Santana accessories on Full Street, Shanghai GM’s auto parts can only be replaced at factory-designated 4S shops, with no option for “take-out.” This policy has raised questions, especially after a reader named Mr. Li contacted the reporter in late July, asking: “As the largest domestic car sales company, is Shanghai GM using its monopoly over spare parts to gain high profits?” Curious about these claims, the reporter visited 4S store managers from Beijing Jeep and FAW-Volkswagen. Their responses were surprisingly different. They confirmed that customers could indeed purchase parts and take them elsewhere for repair. “If you think our fees are too high, you can buy the parts outside and bring them in,” one manager said. The reporter also learned that many automakers, including Beijing Jeep and FAW-Volkswagen, have separate supply channels for their 4S stores and the general accessories market. Consumers can choose to either get repairs done at the 4S shop or buy original parts themselves and have them installed elsewhere. When asked why some manufacturers don’t sell original parts directly, a Beijing Jeep 4S store representative explained with a smile: “It’s good for business. If you go outside, you might end up with fake parts. You’ll have to come back here for real ones, which means more customers will keep coming in for repairs.” The reporter then called Shanghai GM’s press office to ask about the policy. The response was: “The main purpose is to ensure market cleanliness and protect consumer rights by preventing counterfeit goods. It also ensures the quality of vehicle maintenance.” The implication was clear: even if a customer buys parts themselves, they must be replaced by the 4S shop’s technicians to guarantee authenticity. Original parts are not sold separately. On July 25, Mr. Li tried to buy a Buick Regal water tank from a Shanghai GM 4S store in Beijing’s Daxing area. He had recently damaged his car’s water tank and found that the 4S shop charged over 2,000 yuan for a replacement, while the same part was available online for just a few hundred yuan. To save money, he planned to buy the part himself and have a friend install it. However, the staff refused to sell him the original part, claiming that Shanghai GM strictly prohibits taking parts out of the store. Mr. Li then visited several other 4S stores across Beijing, including those in the Simei, Qinhe, Suipu, Ganbo, Tianyu Xing, and other specialized Buick dealerships. All of them responded the same way: “Shanghai GM has strict rules — repairs are allowed, but parts cannot be taken out.” Desperate, he went to the Auto Parts City in the western suburbs of Beijing, but even there, no original Shanghai GM parts were available. A local seller told him, “We don’t sell Shanghai GM parts, and if you do find them, they’re likely fake.” Is this really a monopoly aimed at maximizing profit? An internal employee of a Shanghai GM 4S store revealed to the reporter that the company enforces strict rules on its parts distribution to maintain control over the aftermarket and maximize profits. All 4S stores are prohibited from selling parts directly, ensuring the manufacturer maintains dominance over the supply chain. He recalled an incident where a 4S store in Guangzhou was suspended for three months because it sold a Buick chassis privately, diverting customers to other stores. Based on this, in 2002, all Beijing-based Shanghai GM 4S stores secretly signed a “regional alliance” agreement to limit competition. The pact prevented any store from lowering repair prices or selling parts directly, ensuring a balanced profit structure. According to industry sources, seven 4S stores in Beijing are all profitable, with annual net profits exceeding several million yuan, and the highest reaching 6 million annually. Even though Shanghai GM recently announced its first major price cut in response to the market downturn, the profit margin on the cars themselves is not as high as on the aftermarket. Wang Qianhu, director of the Legal Affairs and Complaints Department at the China Consumers Association, stated in an interview: “The uniform pricing model of 4S stores is inherently unreasonable. A single supply channel doesn’t provide fair competition for other auto repair shops, nor does it give consumers true choice.” He added that the root cause of the 4S model’s popularity in China is the lack of relevant regulations.

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