SHANGHAI (Reuters) – BMW AG
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
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)