China Pressures Carmakers to Cut Prices

Anti-monopoly investigations in China have prompted Audi, Jaguar Land Rover and Mercedes-Benz to reduce prices on their vehicles and/or replacement parts.

Earlier this month Mercedes-Benz announced it is dropping prices on repair parts and service by as much as 20%. Last Friday JLR announced it would make similar cuts on certain Ranger Rover, Range Rover Sports and Jaguar models.

Now Audi says it will reduce parts prices in China as much as 20%, effective Aug. 1.

The cuts come as China's National Development and Reform Commission continues probes into claims of overcharging in multiple industries, including pharmaceuticals, food and technology. NDRC has levied hefty fines against some companies for what it considers unfair pricing.

Chinese state-sponsored television reports have been publicizing relatively high vehicle prices in China for months. Last summer they pointed out that a Ranger Rover model that sells for about 1.9 million yuan ($305,000) in China costs less than one-third that much in the U.S.

NDRC said in February it was investigating possible monopolistic pricing of aftermarket sales and service among foreign car brands in China. It isn't clear if voluntary price cuts by carmakers will enable them to avoid penalties.