1. 11
Background & Changes
 Parallel Imported vehicles have existed in China for a long time
 Legal, but not in good compliances with government administrative policies.
 Need to pay all taxes and fees just as regular vehicles for legalization, free of trade & transfer after tax cleared
 However, could be very tricky in registration and maintenance procedures
 Government granted new policies for anti-trust of auto industry
 关于停止实施汽车总经销和汽车品牌授权经销商备案工作的公告
-- State Administration for Industry & Commerce, 7/31/2014
 国务院办公厅关于加强进口的若干意见
-- General Office of State Council, 10/23/2014
 关于在中国（上海）自由贸易试验区开展平行进口汽车试点的通知
-- Commerce Committee of Shanghai, China (Shanghai) Free Trade Zone Administrative Board, etc. 1/7/2015
Parallel Vehicle Import
Policy Highlights (Shanghai)
 Qualification of Auto Dealers
 5+ years of auto dealership, gaining profit for 3 years in straight, 400 million revenue in the last fiscal
year
 Dealers are responsible for warranty (including recall, ‘three guarantees’, after-sale
service, etc)
 No used cars and illegal
Source: http://www.autohome.com.cn/news/201501/859108-all.html?pvareaid=101380

2. 22
Parallel Vehicle Import
Parallel Imported Vehicle V.S. Regular Vehicle
 10%-20% cheaper
 More Newly-
Released Models
 More High-Ended
and Non-Popular
Models
 Manufacturers are
not responsible for
after-sale service
Parallel Imported Regular
 Perfect
Compliances with
Laws & Regulations
 Both Manufacturers
& Dealers are
responsible for after-
sale service
 Higher Price, but
predicted price-drop
in the future.
Source: http://auto.sohu.com/20150612/n414907235.shtml

3. 33
Parallel Vehicle Import
Parallel Imported Vehicle After-Sale Service Policy
 Parallel vehicle dealer is responsible for after-sale service (including recall, warranty,
etc.), while manufacturers are be responsible for regular vehicles
 Most parallel vehicle dealers partner with shops and garages to fulfill their commitment of
service and maintenance.
 Dealers also partner with insurance companies, allowing owners to fix/conduct
maintenance in ‘4S’s with ‘After-Sale Insurance’
Opportunities in Aftermarket and CAAPA
 Comparing with ‘4S’, independent shops and garages are more economy choices for
parallel imported vehicle owners (saving from additional insurance cost and ‘4S’s higher
labor and material costs).
 CAPPA could partner with parallel imported vehicle dealers, and sign the exclusive
service and maintenance contract with dealers.
 As a nation-wide alliance, CAAPA and our ‘AutoValue’ shops and stores could leverage
the network advantages, which ensures the high-quality service just as certified ‘4S’s.
 Our network also creates a ‘win-win’ for both dealers and us: wider customer basis
 Demographic: Higher margin from luxury vehicle owners, quicker turnovers
from popular model owners.
 Geographic: While current parallel imported vehicle owners are mostly come
from regions around SH, TJ, GZ, our network enables the expansion to new
regions