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Chinese Lemon Law Puts Squeeze on Car Makers
A stiffer vehicle warranty law in China may lead to consolidation for some of the nation's smaller carmakers, Reuters says.
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A stiffer vehicle warranty law in China may lead to consolidation for some of the nation's smaller carmakers, Reuters says.
The country's new "lemon law" gives consumers nearly as much protection as U.S. car buyers, protecting them by requiring free repairs of defects or replacement of faulty vehicles.
Under the new law, a full refund or vehicle replacement is due if serious safety issues are not resolved after two repairs within a two-year, 50,000-km (30,000-mile) warranty period.
Reuters says China's largest manufacturers are ready to handle the new regulations that went into effect this week. But it opines that some of China's 70 homegrown producers many of them assembling vehicles with inferior quality could struggle to cope with sharp increases in warranty costs.
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