More car price cuts expected this year
9/2/2004 15:49
Domestic car prices are expected to be slashed by 10 percent this
year, with those for imported sedans to slump after a batch of new import
licenses are issued, the Shanghai Morning Post reported today.
The successive
prices cuts on cars indicated that car prices are gradually returning to a
normal level, said an industry analyst.
Domestic sedans reported an average
of 9.05 percent in price cuts last year, and if domestic sedan prices to keep in
line with the international market by 2006, home-grown sedans prices are
predicted to be cut by an average of 13 percent every year in the following
years, the analyst pointed out.
Market demand for cars is rebounding, and
people care more about safety and services when buying cars.
Mid-end cars are
expected to become a new focus in the market, instead of the economy sedans,
with market shares predicted to account for more than 40 percent.
The mid
and high-end sedans are gradually claiming the market previously taken by
low-end cars with engine capacity smaller than 1.6L. In Shanghai, only the
vehicles with engine capacity reaching certain level are allowed to enter
elevated roads and tunnels.
The high-flying license plate prices in Shanghai
are cited as another reason for local car buyers to select mid and high-end
sedans.
Therefore, economy sedan producers have to cut prices to win back
the market, with prices of Xiali models cut by 2,000-6,000 yuan (US$241-US$723)
last weekend, and Jili models cut by 4,000-5,000 yuan.
This year is the
final year for China to set quotas for imported cars. According to some local
imported car dealers, as new licenses for imported cars this year haven't issued
yet, prices are stable for imported sedans with small engine capacity.
On the
contrary, imported sedans with large engine capacity registered price reductions
this year, with Benz S350 cut from 1.35 million yuan to 1.15 million yuan and
BMW760 from 1.97 million yuan to 1.77 million yuan.
With a new batch of
licenses to be issued soon, imported car prices are sure to slump, with prices
of some large engine capacity models likely to be cut by 20,000-30,000 yuan.
Wendy Zhang/ Shanghai Daily news
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