Chinese Luxury Car Buyers Shop The Very Unglamorous Gray Market

Image courtesy of Eric Norris

Here at Consumerist, we’re fascinated with the global gray market: the system of parallel imports that gives us Omega watches from Paraguay at Costco and a pirate Trader Joe’s store in Canada. There are even bigger things that trade on the gray market, though: in Shanghai, there’s a place where luxury car buyers can save money by purchasing cars that haven’t been imported through official channels.

Shoppers looking for a great deal on a BMW or Mercedes can head to the Free Trade Zone in Shanghai, where they can find what can best be described as a “car store” that lacks any of the amenities that we normally associate with car dealerships, especially for luxury brands. The Wall Street Journal explains that the dealerships lack amenities like fancy seating and free snacks and beverages that you might expect in a high-end dealership. The advantage, which many buyers find too good to resist, is that they can save about 20% on the normal price of imported cars in China.

The two-month-old Waigaoqiao Automobile Exchange Market also lacks sales staff who know the merchandise as well as the employees of a normal dealership might. That makes sense, because they have to sell a wide variety of models, so they don’t have deep knowledge of any given brand. “Here we sell different brands and I must teach myself,” a salesman who used to work at a Volkswagen dealership explained.

Buyers find the conditions sparse and the staff gruff at best and rude at worst. They’re still buying, though, since they can’t resist a good deal. Eliminate haggling, and this might be the ideal car-buying environment for most Americans.

At Chinese Gray-Market Car Dealers, the Price Is Right [Wall Street Journal]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.