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December 18, 2018

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Home » Business » Auto

Car prices dive as govt moves to hold off major tariff increase

Car prices have fallen after China suspended tariff increases on imported US parts and cars.

China will cut tariffs on US-made cars and auto parts to 15 percent from the planned 40 percent between January 1 and March 3, the Ministry of Finance said on its official website.

In response to Friday’s decision, German automaker Mercedes-Benz announced yesterday that it has lowered prices for all its imported cars from the US.

The carmaker said that the cut is effective immediately, reducing prices for its four models by up to 135,000 yuan (US$19,575).
Mercedes-Benz said that the company will continue to follow up the policy and make adjustments based on the market demand.

US electric carmaker Tesla lowered prices of its car models including Model S and Model X in China soon after the government announced its decision.

The price of Model S 75D has been cut from 782,900 yuan to 742,300 yuan while the Model X 75D is 65,000 yuan cheaper, with the new price set at 796,800 yuan, the company announced on its official website.

The move is another price cut after the company decided to lower prices of its car models as the end of November.

In late November, Tesla just lowered prices of its Model X, Model S and Model 3 cars in China, as the company said it had absorbed a significant part of the tariffs to make cars more affordable to Chinese customers.

On Saturday, German automaker BMW said it would temporarily adjust the suggested retail price of its US made vehicles in the Chinese mainland market, including the BMW X5, X6, X5M and X6M. BMW said the new price is effective to March 31.

“In the following three months, BMW will continue to look closely at the government policy and take quick action if there is any tariff adjustment,” the company said in a statement.

BMW said that the price of the BMW X6, X5M, X6M and the third generation BMW X5 has been reduced to the level they were when the additional duty was not imposed.

It means the recommended new prices are back to the level set in May.

US automaker Ford has not announced any price changes so far.

“(But) as a leading exporter of vehicles from the US, we are very encouraged by China’s announcement to reduce tariffs on US-produced vehicles to 15 percent,” Ford said in a statement.

“We applaud both governments for working together constructively to reduce trade barriers and open markets.”

Last year, Ford exported nearly 50,000 US-built vehicles to support the growing auto market in China — the world’s largest auto market — according to the data provided by the US car manufacturer.

In November, China’s auto sales dropped 13.9 percent to 2.55 million vehicles, according to industry data.




 

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