BMW, Mercedes take aim at China grey market imports
Mercedes and BMW launch probes into unauthorised exports from the US as profit in the world's top vehicle market is threatened
Mercedes-Benz and BMW are probing unauthorised exports of luxury cars from the United States to China, which have recently surged and threaten profit in the world's largest car market, senior executives said.
So-called grey imports to China have jumped since the country allowed dealers registered in Shanghai's free-trade zone to import vehicles without the consent of foreign carmakers, exacerbating price pressure for German manufacturers.
As a result, Daimler, which owns premium-car brand Mercedes-Benz, said it intensified efforts to clamp down on exports of US models to China about a year ago.
"We got concerned when it hit 4,000," said Steve Cannon, the head of Mercedes-Benz USA, referring to the number of vehicles being shipped to China from the US.
Mercedes can penalise US dealers who knowingly sell vehicles to so-called grey-market exporters, who operate through unauthorised channels.
As a first step, it had encouraged dealers to vet buyers of exclusive models such as the GL large sport utility vehicle, using online resources such as Zillow to check addresses of would-be buyers, and discouraged cash payment for cars, Cannon said.
"We nipped it in the bud," Cannon said, referring to the ability of unauthorised buyers to acquire vehicles in the US for immediate export to China. "We took it down to almost nothing."