Parallel Importing

  • Stage 1

    US Market

    Once we acquire our vehicles from the US market, we transport them from the dealership to our warehouse, where they will be stored until they are shipped to China.

  • Stage 2

    US Customs

    We then proceed with the extensive documentation with US Customs. Once completed and approved, the vehicles will be shipped to China in their own containers. After one month at sea, the vehicles will finally arrive in China.

  • Stage 3

    China Customs

    Once the vehicles arrive in China, they will remain in the Free Trade Zone (FTZ). Our China offices will complete the necessary documentation and pay the required customs taxes.

  • Stage 4

    China Market

    After the vehicles are approved by customs, we then transport them to our dealership, and offer to our valued customers.

Based on the U.S. Intellectual Property Rights (IPRs), distribution rights are exhausted upon the first sale anywhere in the country. Essentially, once IPR’s are exhausted, it becomes absolutely legal for anyone to sell their purchased goods within the country. After all, it is their rightfully owned property. For example, if company “X” has a patent for a product in the U.S., and sells its product to a consumer in the U.S., “X’s” IPR rights are exhausted within the U.S., The consumer or buyer has the right to resell the product anywhere within the U.S. to anyone they wish.

When the U.S. dollar was strong, during the 1981-1986 period, the number of cars purchased in Europe by U.S. tourists grew 2,000%. In 1986 the total value of products distributed through unauthorized channels in the U.S. reached a peak of $10 billion (Palia and Keown 1991).

Based on the Chinese intellectual property rights (IPRs), IPR owners lose the exclusive privilege after the first sale of the product anywhere in the world, and parallel imported goods become legal. For example, if company “X” has a patent in the U.S. and sells its product to a consumer in Japan, “X’s” rights are exhausted anywhere in the world. The buyer in Japan can freely resell the product anywhere in the world.

A Chinese government pilot allowing unauthorized car dealers to sell imported cars was extended to Tianjin in 2015. The result was an increase of 14.1% in what are known as ‘parallel imports’ to 79,000 units in 2015.