China Petroleum and Chemical Corp, also known as Sinopec Corp, is expanding into auto sales. In Beijing, one of Sinopec's fuel stations has already sold its first car.
Sinopec is currently in talks with automobile e-commerce platforms as it plans the launch of its auto sales. Last year the company set up pilot projects to sell cars in Hunan and Hebei provinces.
Experts believe Sinopec can benefit from its extensive petrol station network, and its involvement in the automobile sector will alter the market pattern at a time when competition is intensifying.
According to Zhao Ping, director of the international trade research department at the China Council for the Promotion of International Trade, Sinopec's move is a great opportunity for for the company to gain market share, since China has done away with the monopoly-like vehicle sales segment.
Zhao said that Sinopec's car sales foray is part of its efforts to expand its non-oil business and diversify its portfolio, which will in turn improve its operational capacity.
"Selling automobiles and oil will promote the performance of both divisions, and will help Sinopec to enlarge its market. It is believed Sinopec will cooperate with more partners, enabling diverse brands to meet demands of various customers,"she said.
Sinopec's car sales expansion follows a new set of regulations that took effect on July 1, replacing the decades-old policies that a car seller must be authorized by a car-maker; this is expected to spawn more economical sales channels.
Sinopec is not alone in taking advantage of the new policies. Gome Electric Appliances and Suning Holdings are also making a foray into car sales based on their nationwide networks.