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Foreign carmakers in China face possible probe over price-fixing
奥迪Q7在华贵出百万 进口车暴利涉嫌垄断
China’s top economic planner - The National Development and Reform Commission has asked an auto association to collect data on the price of foreign cars sold in the world’s largest automobile market. It’s the latest inquiry into pricing of foreign products in the country. Xie Sisi reports.
In China, consumers are paying three times more on imported cars than consumers in overseas markets.
Research shows that the Volkswagen Touareg 3.6 costs an equivalent of more than 295,000 yuan in the U.S., whereas its price tripled to 780,000 yuan in China.
And the Porsche Cayanne priced at 300,000 yuan in U.S., is selling at over 880,000 yuan in China.
An Audi Q7 in the U.S. costs about 310,000 yuan, but the same car in China costs over 1 million yuan.
These expensive cars are sold mostly at the authorised dealerships - the 4S stores
"This latest model of Range Rover costs over 2 million yuan. And it’s shipped from the UK. Everything from the outside to interior configuration are exactly the SAME as those ones on sale simultaneously in the overseas market."said a salesman at 4S store.
Despite the staggering high prices, foreign brands are extremely popular in China.
“Foreign car makers are cashing in on the Chinese love affair with the automobile. Audi, for example, sold nearly 403,000（402,888) vehicles in China last year. More than 80,000 (80,188) were imported. And this year, the company forecasts an 11% increase in sales. Foreign carmakers and their local partners control around three-quarters of the overall Chinese market.”
The formula for the import price equals the original price set by the car maker plus 25 per cent tariffs.
On top of that there is a value-added tax of 17% and a consumption tax of up to 40% depending on the engine size.
At the end of 2011, China’s Ministry of Commerce issued a notice to lower the tarriffs on imported cars for several brands,however it still does little in reducing the price of imported cars.
“The foreign carmakers authorised the local dealer to sell their cars before the imported vehicles have been distributed into different regions in the country’s 4S stores. The distributor therefore has the absolute power to set the selling prices."said Xu Binjin, Honorable Chairman of China Automobile Dealers Association.
Experts say there’s limited sales channels in China, and 4S stores have monopoly power over imported parts, and also prohibit dealers cross-regional sales.
