(Yicai) Sept. 2 -- China has released its first guidelines on fair overseas competition and compliance in the auto industry, regulating Chinese carmakers' pricing, promotion, and brand marketing practices and calling on them to avoid frequent and significant price changes in foreign markets.

The guidelines, made public by the Ministry of Commerce, the Ministry of Industry and Information Technology, and the State Administration for Market Regulation yesterday after being issued on Aug. 24, consist of four chapters and 20 articles that apply to market competition and other business activities conducted by domestic auto firms overseas. They also offer general guidance on compliance in production safety, quality management, labor protection, data security, and other areas abroad.

Amid intensifying overseas competition in recent years, Chinese car brands have started undercutting one another to secure a bigger share, and the same model may vary widely in price across countries.

Automakers may set pricing strategies that are based on costs and guided by global supply and demand, and should not "disrupt the order of market competition to gain unfair competitive advantages," according to the guidelines. When setting suggested retail prices abroad, they should form clear price tiers for different vehicle configurations to "avoid harming the interests of overseas consumers and their brand image through frequent and sharp price adjustments."

On price gaps between markets, the guidelines require carmakers to set reasonable differences after weighing factors such as local market conditions, tax structures, and logistics costs to avoid disorderly sales and respect the independent pricing rights of dealers and agents in host countries. 

Regarding sales, automakers should label prices transparently and clearly, and not arbitrarily charge above the listed price or collect undisclosed fees. Discounts, financing offers, and other promotional schemes should follow local laws and commercial practices, while brand marketing campaigns must disclose information truthfully and completely, without false advertising.

China's auto exports surged to 8.32 million units last year from below one million in 2020, having reached more than 200 countries and regions, according to the China Association of Automobile Manufacturers. In addition, Chinese companies have invested in auto manufacturing in more than 80 countries and regions.

The guidelines also cover overseas production safety, quality management, labor protection, data processing for smart connected vehicles and autonomous driving, intellectual property, antitrust compliance, and the green and low-carbon transition.

China's auto industry is "in a period of upgrading from exporting products to exporting supply chains," the National Business Daily reported, citing Shi Yonghong, vice chairman of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products. Building plants overseas and running localized operations involve deeper compliance requirements in environmental protection, taxation, employment, data localization, and other areas, Shi noted, adding that the new rules will help carmakers, parts suppliers, and service networks go global together.

Editor: Martin Kadiev