Dealers of luxury auto brands including Mercedes Benz, BMW and Audi have launched promotional sales for their cars with large capacity engines in Beijing.

 

The financial crisis and the implementation of a new consumer tax in the second half of last year has impeded the sales of imported vehicles with engine capacities of over 3.0-liters. As a result, dealers have had to lower prices to increase sales in order to keep their capital chains from being broken, noted an official at the China Automobile Trading Company (CATC).

 

Recently, in the Beijing automobile market, Audi Q7s with engine capacities of over 4.0-liters have been discounted 200,000 yuan, vehicle purchase taxes on all BMW X3-Series have been reduced or exempted, and the highest specification BMW X3 3.0i has been priced at 600,000 yuan after discount. The luxury model of the 4.8-liter BMW X5 has been discounted 230,000 yuan, the 2009 model of the Honda Acura MDX has a discount of 100,000 yuan and is now priced at 700,000 yuan, the Mercedes Benz E230 model is offering a maximum discount of 80,000 yuan, and the high-end Mercedes Benz S600L is even offering a price cut of 300,000 yuan.

 

Since Spring Festival, the market for vehicles with engine capacities of over 3.0-liters has seen a 10 percent fall in the average price, said an expert in auto price monitoring. The fall is mainly due to a rise in the consumer tax rate adopted in the second half of last year. This tax increase led to an increase in the cost of imported vehicles and finally caused the increase in their sales prices after September last year. Prior to Spring Festival, however, most dealers of imported large capacity engine vehicles still sold vehicles that were imported before the raising of the consumer tax rate. In addition, since some dealers had completed their annual sales goals, there were no noticeable declines in prices. After Spring Festival, dealers were faced with pressure for sales from producers, leading to a wave of price reductions for large capacity engine luxury vehicles.

 

The downturn of market shares since last September has also played a partial role in the wave of price reductions.

 

Since the adoption of the new consumer tax in September last year, the sales volume for imported vehicles with an engine capacity over 3.0-liters has started to drop, with nearly 10,000 vehicles sold in this market segment in September and 8,500 units in October. The sales volume dropped to 6,000 units in November and stood at 6,300 units in December, according to relevant staff at CATC.