Shanghai VW leads price increases
16/5/2005 16:36
Gu Jia/Shanghai Daily news
Since the conclusion of
the latest auto show in the city, Shanghai Volkswagen has on two occasions,
April 29 and last Friday, May 13, set new prices. This action is leading to
uncertaincy in the pricing of the Santana series in the local auto market,
today's Eastday.com reports.
Another auto show in Beijing last year was the
beginning of an auto price cutting war, involving almost all the main auto
manufactories in China, and lasting for over one year. It was Shanghai VW who
began that war.
"It's just a pricing recommendation, not a pricing
conspiracy or a required action," Zhu Qing, vice general manager from the
distribution center of Shanghai VW, explained repeatedly. "We are intending to
save the franchisers from unhealthy competition and meaningless
losses."
Actually, the suggested prices are set to meet the requirements of
some local franchisers who have suffered great losses due to the fierce
competition, Zhu added.
However, most auto franchisers, who regard it as a
price agreement, do not appreciate the actions of Shanghai VW.
"It would be
a balanced deal If they changed the formula for the return bonus," one
franchiser complained. "However, the figure was really only 60 percent last
year." (When retailers sell cars below the suggested VW price, the company still
requires its 2 percent bonus.)
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