VW sparks price wars
17/6/2004 15:55
The Shanghai Volkswagen Automotive Company Ltd announced yesterday its
largest-ever price reductions on all its car models. The announcement was
followed by other price cuts by the Changchun-based First Automotive
Works-Volkswagen Automotive Co Ltd, the Labor Post reported today.
Shanghai
VW has decided to slash prices on all the car models under its flag, such as
Passat, Polo, Santana and Gol, by between 3,000 and 10,000 yuan
(US$361-US$1,204).
Except for the new Santana 3000 model with a price
reduction of 3,000 yuan, most of the other model prices were reduced by 10,000
yuan.
Only two hours after the Shanghai VW announcement, Volkswagen Group
China announced price cuts of between 5,000 and 12,000 yuan on Jettas, Boras and
Golf sedans from the FAW-VW Automotive Co Ltd.
Prices of Golf models were cut
by 5,000 yuan, and those of Bora and Jetta sedans were slashed by more than
10,000 yuan.
Although the two auto manufacturers explained the price cuts as
promotions for the Olympic Games, industry analysts said the producers had to do
so to prevent their market shares from declining.
In the first five months of
the year, the Shanghai VW and FAW-VW had only 28 percent of the market
nationwide, down ten percentage points from the same period last year.
The
large-scale price cuts by the two VW joint venture companies will have a large
impact on the domestic car market, as the car models involved in the cuts cover
nearly all market categories, said an industry analyst, adding that an
earthquake is expected to soon shake up prices in the Chinese car
market.
Wendy Zhang/ Shanghai Daily news
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