Under pressure from the Chinese government, foreign car manufacturers are dropping prices. Starting Thursday, German automaker Audi will sell replacement parts at a significantly lower price, the firm confirmed to Handelsblatt this week. Daimler has already lowered prices for replacement parts. Britain’s Jaguar Land Rover has gone further and dropped prices for entire autos.
Foreign luxury-class car makers are a victim of their own success in China. Foreign luxury vehicles have a 70 percent market share among drivers in China and hold 62 percent of the overall market. Domestic producers can’t keep up and fell for the tenth time in a row in June. That is annoying the Beijing government, as it wants to transform the nation’s automakers into dominant players.
Since last year, China’s National Development and Reform Commission has increased pressure on foreign auto makers, first in confidential talks with the companies, and recently with public statements. The government is presenting itself as a consumer advocate.