SHANGHAI -- China (Shanghai) Pilot Free Trade Zone (FTZ) on Jan 7 launched a pilot program on parallel imports of cars, which allows dealers to purchase cars directly from abroad.

The program, green-lighted by a circular issued on Jan 7, will allow cars to be imported without getting authorization from carmakers and thus promise lower prices for Chinese buyers.

The Shanghai Commission of Commerce and the Shanghai FTZ administrative committee jointly issued the circular.

The circular has listed requirements for companies wishing to join the program, including having engaged in car transaction for five years or more and reporting profits over the past three consecutive years.

Responding to doubt over after-sale services of parallel imported vehicles, the circular required participating companies to shoulder duties of recall, after-sale service, “three guarantees” of repair, replacement or refund of faulty products, among others.

Cars imported through this channel must meet China’s relevant quality and technical standards, it added.

Gu Jun, deputy head of the Shanghai Commission of Commerce, earlier said the pilot program would benefit the market competition and the pricing of cars.