Price Of BMW’s US-Made X5 And X6 SUVs Sold In China Increased Due To Trade War

In order to cover up with the additional costs of tariffs on US car imports into the world’s biggest automobile market, the prices of two US-made crossover sport-utility vehicles in China has been announced to be raised by German carmaker BMW, said the company.

There would be an increase of 4 per cent to 7 per cent in the maker-suggested retail prices of the popular, relatively high-margin X5 and X6 SUV models, the company announced over the week end and the prices are set to be increased Top of Formfrom Monday.

The fierce competition among luxury car brands in China is underscored by the fact that BMW is ready to absorb a large part of the higher costs involved in bringing of the cars from its factory in South Carolina, US to China which in turn is indicated by the rate of price increase.

This measure by BMW was preceded by the move by China earlier this month to impose new tariffs on US products worth $34 billion which includes soybeans, cars, lobsters etc., as a counter measure to the trade row with the US.

Additional 25 per cent tariff on US-made cars as of July 6 was imposed by Beijing even after the authorities in the country reduced tariffs on all cars imported into China this year. This has resulted in a total of 40 per cent of tariffs on imported cars from the United States intro China.

“BMW stands for free [trade] but can’t stand still without taking actions to respond to the market changes,” a BMW spokeswoman said in an email.

There is a booming demand for SUVs in China and X4, X5 and X6 crossover SUV models are imported by BMW from the United States for sale in China. More than 100,000 vehicles from the United States to China was shipped by the German carmaker last year.

The company made no reference to pricing of its X4 model.

Earlier, the US carmaker Ford Motor had said that it would not enhance its prices for now in an attempt by the company to maintain its business momentum and the decision of BMW to absorb a large part of the impact of the higher tariffs follows a similar line.

The price of GLE, a sporty midsize SUV produced in the state of Alabama, US, was moderately raised for its China market by German rival Mercedes-Benz which is operated by Daimler, according to China-based car dealers.

The company was seeking out ways and means to reduce and negate the impact of the trade war, said Daimler chief executive Dieter Zetsche on Thursday. This would include a review of whether to shift some US production to China.

(Adapted from SCMP.com)

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Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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