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Top global car brands slash prices ahead of VAT cuts

By Wang Junwei | chinadaily.com.cn | Updated: 2019-03-18 15:05
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A customer consults with a salesperson in Shanghai, Feb 23, 2019. [Photo/VCG]

Mercedes-Benz, BMW, Jaguar Land Rover, Lincoln and other foreign carmakers announced price cuts for their models in response to the upcoming value-added tax cuts, according to Beijing Daily on Monday.

The VAT rate in China for manufacturing sectors will be cut to 13 percent from 16 percent starting April 1, the report said.

Last Friday, Mercedes-Benz took the lead in reducing prices for its models, with the maximum drop of 64,000 yuan ($9,500) for Mercedes-AMG starting from March 16.

BMW, Volvo, Lincoln and Jaguar Land Rover then joined the move, with price of Range Rover, a premium SUV model of Land Rover, cut by up to 85,000 yuan.

Despite this, some insiders said the price cuts will have limited impact on consumers.

"The auto market may not see a 3 percent change in actual terminal price, and for some models, prices may even increase after the implementation of the National VI emission standards," said Cui Dongshu, secretary-general of China Passenger Car Association.

"Car buyers should not have unrealistic expectations for price reductions, and they should make reasonable choices according to their needs and purchasing ability," Cui added.

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