Car Talk

In Nod to Chinese Pressure, Mercedes Debuts Luxury SUV With 5% Rebate as Standard Accessory

China Audi
An autoworker in Audi's plant in Changchun, China.
  • Why it matters

    Why it matters

    The downward pricing trend in China could affect the bottom lines of foreign companies such as Audi.

  • Facts

    Facts

    • Daimler, Audi, Jaguar and Land Rover have yielded to Chinese pressure and dropped parts prices.
    • Chinese automakers’ domestic market share is falling.
    • The government in China is presenting itself as a consumer advocate.
  • Audio

    Audio

  • Pdf

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.

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