Aware that China's WTO entry would trigger big growth in car
imports, the country's leading automakers have initiated price cuts
to retain sales since the beginning of the new year.
The car sales company for Jilin-based China First Automobile
Group Corporation, one of China's three leading automobile
manufacturers, recently announced that it has lowered prices for
four of its Hongqi (Red Flag) models by an average of 30,000 yuan
(US$3,614) per vehicle.
The four middle and top-of-the-range models, now cost between
219,000 yuan (US$26,385.5) and 319,800 yuan (US$38,530.1) each.
"The new prices are lower than for imported cars of the same
class," said Sun Baolin, marketing manager for the sales
company.
Earlier, prices for Mazda manufactured in South China's Hainan
Province were also lowered. The cuts ranged from 10,000 yuan (US$1,
205) to 20,000 yuan (US$2,410) per vehicle.
Dongfeng Citroen Automobile Co., Ltd., a Sino-French joint venture
based in Hubei Province, has lowered the prices of its Fukang
cars.
Shanghai Volkswagen Automobile Co., Ltd. and Shanghai GM Company
Ltd., which together account for half China's car market, said
that they would not consider price cuts in the near future. But
analysts here suspect the length of the delay will be determined by
strength of the impact from imported cars.
China's WTO commitment requires it to drastically lower car import
tariffs over the next five years. On January 1 this year, the
tariff for cars below 3L was lowered from 70 percent to 43.8
percent and for cars above 3L from 80 percent to 50.7 percent.
Customs statistics show 105 cars were imported through the Shanghai
Customs in the first week of January 2002, a much higher number
than over the same period last year.
Most of the newly imported cars, customs sources said, were well
known brand names including BMW and Daewoo. Prices of many BMW cars
are now 80,000 yuan (US$9,639) to 210,000 yuan (US$25,301) lower
than December last year.
Chinese automakers reported the production of 643,373 cars in the
first 11 months of 2001, up 17.14 percent year-on-year. Car sales
reached 656,779 in the same period, up 22.9 percent.
(China
Daily January 13, 2002)