A CITY-LEVEL hearing for a car dealership accused of forcing customers to buy unwanted premium warranty services began Wednesday, Shenzhen Evening News reported.

    The dealership faces a 426,000 yuan (US$68,710) fine, while the manager of the dealership, Song Xiuren, denied his dealership did anything wrong and instead said he took necessary steps to protect his business after the city government announced a sudden cap on the number of new cars that could be registered each year in Shenzhen last December.

    Since the registration cap has come into force, nearly 30 percent of car dealerships across the city have closed, according to earlier reports.

    The car dealership, Dasheng Mechanical and Electrical Equipment Ltd., which is authorized by Beijing Hyundai, required its customers to purchase service plans costing up to 8,000 yuan before allowing the customers to leave with their cars.

    The customers had already signed a contract for the car, but the dealership played the customers’ fears that new restrictions against new car registration would mean they wouldn’t get their cars unless they got them off the car dealerships lot quickly.

    During the public hearing, Song protested against the accusation.

    “Why did you point a finger at my company while there are so many complaints of unfair practices with other car dealerships?” Song asked staff from the city’s market supervision administration.

    Tang Chengxiao, an investigator with the administration, said that his Song’s dealership had received the most complaints.

    Song defended his company’s actions, saying that the car registration limit policy adopted by the city government last December would raise his labor and storage costs.

    Song said the car dealership adjusted some content in the contracts so as to make it fair for his dealership.

    The city government has capped the number of new cars allowed to be registered each year at 100,000. The new car plates are given out each month via lottery and auction.

    The investigator pointed out that the contracts Song’s customers signed are protected under contract law. Forcing customers to pay more before allowing them to take their cars violates the law.

    The verdict will be announced within 15 working days.

    (Zhang Qian)