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Lemon Law in China

Employees work along a Geely Automobile Corporation assembly line in Cixi, Zhejiang province.

Smaller Car Makers Face Squeeze from China's 'Lemon Law'

A beefed-up vehicle warranty law that takes effect in China on Tuesday is unlikely to burden global automakers, but will likely raise costs for smaller local players that may add to pressure for eventual consolidation in China's fragmented car industry.

The new "lemon law" gives Chinese consumers nearly as much protection as enjoyed by their counterparts in the United States to obtain free repair of faults or replacement of defective vehicles.

Reporting by Norihiko Shirouzu and Samuel Shen, REUTERS.