Luxury carmakers including Audi, BMW and Mercedes have witnessed rapidly growing sales on the Chinese mainland, and unreasonable premium prices.
Beijing Youth Daily made a comparison of prices for BMW X6, Audi A8 2013 and Mercedes S350 in Beijing, Hong Kong and Seattle. All three car models are imported to the three markets.
Yuan Guangyu has been living in the United States for 20 years. Yuan did the price research in Seattle, where the car price is in the medium range in the US.
Chen Xinyu has been living in Hong Kong for five years, and did the research in Hong Kong.
The research shows that the luxury cars cost much less in Seattle and Hong Kong. The details are below:
Mercedes S350: $93,000 (569,372 yuan) in Seattle, HK$1.2 million (947,149 yuan) in Hong Kong, and 1.39 million yuan in Beijing;
Audi A8 2013: $86,095 (527,091 yuan) in Seattle, HK$1.1 million (868,180 yuan) in Hong Kong, and 1.36 million yuan in Beijing;
BMW X6: $59,461 (364,033 yuan) in Seattle, HK$930,000 (734,007 yuan) in Hong Kong, 1.06 million yuan in Beijing.
Peopledaily.com.cn also found that the 1.6 million yuan Mercedes GL450 4 Matic is nearly five times more expensive than in the US, where it sells for $58,200 (356,220 yuan).
Moreover, several salespersons said when a customer wants to get the car delivered in several weeks, they have to pay extra after placing the order, because the car has been in short supply during the last two years.
But actually, the supply of cars increased after the car plate lottery policy was begun in Beijing, Shanghai, and Guangzhou, according to earlier media reports.
Yuan said the dealers in Seattle "usually would have enough cars ready as soon as a customer buys a car. When the cars were not available at that moment, the dealers would deliver in several weeks."
Chen said "all the new cars in Hong Kong are imported because no manufacturers are available here. Hong Kong is a free trading port and only levies tariffs on luxury goods. The tariffs on imported cars are lower."
An expert at China Automobile Dealers Association said imported cars to the Chinese mainland are levied tariffs and taxes of less than 140 percent on top of the import price. But many imported cars are offered at retail prices triple or quadruple the import price.
Beijing Youth Daily found that manufacturing and transporting costs contributed 25 percent to 40 percent to the suggested retail price; tariff and taxes contributed 20 percent to 30 percent to the retail price. In the end, dealers may obtain about 30 percent to 40 percent in profits.
On the basis of imported car prices, Chinese mainland levies a 25 percent tariff, 17 percent value-added-tax, and up to 40 percent consumer tax. An imported vehicle trading company on the Chinese mainland usually pays 25 percent income taxes, and other taxes including business tax, urban maintenance and construction tax, education tax, and some more according to local governments.
When looking at a China-made Audi Q5 model and its US equivalent, Peopledaily.com.cn found the China-made car is sold for 150,000 yuan higher on the Chinese mainland than an imported Q5 in the US.
The Audi Q5 2.0 TFSI, imported to the US, is priced at $37,300 (228,267 yuan). The China-made Audi Q5 2.0T has a suggested retail price of 383,600 yuan on the Chinese mainland. Buyers actually pay more because of dealer mark-up from the suggested price.