Driving pleasure, financial pain

Market monopoly

Experts said a major reason for the high cost of maintenance and other services at 4S stores is monopoly of the spare parts market.

"To make more money, carmakers do not allow their suppliers to sell spare parts to other garages," Chen Wenkai, CEO of the auto portal Gasgoo, told China Business News. "With control over the market, they sell the spare parts to 4S shops at high prices and those shops sell them to consumers at even higher prices."

Chen's words were echoed by Shen Jinjun, secretary-general of the China Automobile Dealers Association.

"Monopolies result in high prices - 4S shops won't bear the cost, so they pass it on to consumers," Shen told the Economic Observer newspaper.

In addition to control over spare parts, automakers only make repair specs and maintenance information available to authorized outlets, making it difficult for other mechanics to stay up to date, said Huang Yonghe, chief engineer at the China Automotive Technology & Research Center.

According to China Business News, there were 127 million vehicles on the road in the country by the end of 2013, some 80 percent of them privately owned. Experts estimate the value of the vehicle repair and maintenance market will hit 700 billion yuan annually by 2015.

Despite the huge market, China does not have large chain garages due to "automakers' monopoly over their spare parts and refusal to release maintenance information", Huang said.

The National Development and Reform Commission, the nation's top economic planner and watchdog, is investigating potential monopolistic practices in the auto service market, said an official on Feb 19.

Yet a 2005 regulation from the Ministry of Commerce and other departments prohibits automakers from providing "automobile resources to enterprises that have not been authorized for sale of the specific brands".

The restriction has not been revised since China adopted an anti-monopoly law in 2008. Many in the industry are now urging authorities to implement anti-monopoly efforts in the auto sector.

And some central government departments have also expressed concerns.

"One sector that we will focus on is the automobile after-sales service market and we will regulate the prices of spare parts," Yu Yanchun, deputy chief of the price supervision and anti-monopoly bureau at the NDRC, said during a meeting organized by the China Automobile Dealers Association in 2012.

A Ministry of Transport official said efforts are underway to resolve the issue.

"We have reported the serious problems in the automobile maintenance industry to the Legislative Affairs Office of the State Council," Yu Weijiang, an official at the ministry, told China Business News.

He said the same automakers release information about spare parts and maintenance in many overseas markets but refuse to do so in China because "there are legal loopholes for them."

Noting legislation is a gradual process, Yu urged "relevant authorities to revise regulations to correct automakers' behavior, ensure the auto maintenance industry's sound development, and guarantee vehicle owners' rights and interests".