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Foreign brands race to cut import prices after Beijing reduces tariff
source: automotive news
Beijing's announcement this week that it will cut the tariff on most imported vehicles to 15 percent from 25 percent sent global brands racing to reduce prices on their imported models.
Although the tariff reduction doesn¡¯t take effect until July 1, many foreign automakers have taken action.

Leading the pack is Tesla Inc. On Wednesday, the day after Beijing announced the tariff cut, the U.S. electric vehicle maker cut prices of its Model S and Model X sold in Shanghai and Beijing more than 6 percent.

The same day, Jeep reduced the price of the Grand Cherokee, previously 779,000 yuan ($122,052), by 8.3 percent.

By Thursday, Mercedes-Benz and Volvo cut prices on the range of their imports.

Also Thursday, Ford Motor Co. said it will lower the prices of all imported models sold under the Ford and Lincoln brands the next day.

Ford has yet to build Lincolns in China. The prices of all the five Lincolns -- the MKZ, MKC, MKX, Continental and Navigator -- will be reduced 5 to 7 percent, Ford said.

Other global brands including Jaguar, Land Rover, Audi and Porsche have promised to lower the prices of their imports as quickly as possible.

Demand for imported cars and light trucks has remained strong in China for many years. Up to 1.25 million imported vehicles were sold in the market in 2017, a jump of 16 percent from a year earlier.

So why aren¡¯t global brands waiting until the tariff cut takes effect to lower the prices of their imports? Because competition in China¡¯s imported vehicle market is so stiff.

All sizable global brands have entered China, and most of them are producing vehicles locally to avoid paying tariffs and to roll out customized products.

As each of them is betting on China for future growth, nobody wants to lag in efforts to woo local customers.