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The
German automobile companies each published posts on Chinese
social media announcing immediate price cuts for several models.
The discounts come as China endures a shrinking market for
automobiles as the economy slows.
BMW said it would reduce prices for both domestically produced
and imported models, including the locally-made BMW 3 series and
BMW 5 series, along with the BMW X5 and BMW 7 import models. The
BMW 320Li M model will sell for a suggested retail price of
339,800 yuan ($50,620), a drop of 10,000 yuan from its original
price.
The reductions mark the company's "active response to the
national VAT adjustment notice," BMW said in a post on WeChat,
China's popular messaging app.
Daimler AG-owned <DAIGn.DE> Mercedes-Benz announced similar
price cuts on a range of its cars, also effective immediately,
in advance of the upcoming VAT drop. The cuts shown on its
social media page range from 10,000 yuan to 40,000 yuan on
select models.
On March 5, Chinese Premier Li Keqiang announced that China will
cut VAT across a range of industries, with the tax set to drop
in the manufacturing sector from 16 percent to 13 percent and in
the transport sector from 10 percent to 9 percent.
The carmakers' cuts come as China's automobile industry faces a
major slowdown. In 2018, China's car market shrank 5.8 percent,
marking its first contraction in over two decades.
Policymakers have introduced a range of policies to stimulate
demand for cars. In January, China's National Development and
Reform Commission (NDRC) said it would loosen restrictions on
the second-hand car market and provide subsidies to boost
purchases in rural areas.
(Reporting by Josh Horwitz; editing by Richard Pullin)
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