China's latest drive to protect automotive consumers

In line with the burgeoning ranks of the Chinese middle classes, China’s automotive industry has been developing at a blistering pace in recent years, fed by the desire to own what remains a potent status symbol and, in some cases, a prerequisite for marriage in more prosperous parts of China. In light of the growing demand for passenger vehicles, there has been a review of the legislative protection of consumer rights to introduce additional consumer protection rules similar to (and sometimes more extensive than) those found in more developed markets.

The Recall of Defective Automotive Products Administrative Provisions was issued back in 2004 but primarily regulates mandatory and voluntary mass recalls. There was previously no national regulation providing a basis for determining a car owner’s rights in relation to the repairs or returns of defective automobiles or automotive parts. Warranty terms were basically driven by automotive manufacturers’ and sellers’ contractual terms in a competitive market.

The Chinese government has now stepped in to require certain minimum standards in this area. The State Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) issued the Liability for the Repair, Replacement and Return of Household Automotive Products Provisions on 29 December 2012, which took effect on 1 October 2013. The Auto Parts Provisions are the first national-level rules specifically governing the repair, replacement and return of automobiles and defective automotive parts. This note highlights some of the key provisions in the Auto Parts Provisions…

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