· Anti-monopoly pressure on luxury car price cuts is expected to continue

After Mercedes-Benz, Audi, and Chrysler were investigated, the National Development and Reform Commission's anti-monopoly investigation on automobiles and accessories was expanded again. At present, the investigation of the price monopoly case of 12 Japanese companies has been completed and will be punished according to law. Market participants pointed out that the monopolistic behavior as a key focus is on limiting the price of complete vehicles and the price of spare parts. In the future, the price of spare parts for luxury cars in foreign countries is expected to drop significantly, while the price of whole vehicles is limited.
The scope of the survey covers the US, Japan and Europe brands. “We will inform you of a situation. Recently, our committee has completed the investigation of the monopoly case of auto parts and bearing prices for 12 Japanese companies, and will impose penalties according to law.” August 6 Li Pumin, secretary-general of the National Development and Reform Commission, revealed at the press conference that after the European and American luxury car brands were investigated, the scope of the anti-monopoly investigation was further extended to Japanese auto companies.
Recent media reports said that the National Development and Reform Commission (NDRC) has intensively investigated the monopolistic behavior of foreign-owned brand car companies, but has not obtained official confirmation. In this regard, Li Pumin confirmed that the Shanghai Municipal Development and Reform Commission's investigation of the Chrysler and Hubei Provincial Price Bureau on Audi is nearing completion. It has been found that the two companies do have monopolistic behavior and will be subject to corresponding penalties in the near future. In addition, last week, the anti-monopoly branch of Jiangsu Provincial Price Bureau has conducted anti-monopoly investigations on Mercedes-Benz dealers in five cities including Suzhou and Wuxi. On August 4th, the Shanghai Municipal Development and Reform Commission and the Anti-Monopoly Bureau of the Jiangsu Provincial Price Bureau organized an investigation into the Shanghai office of Mercedes-Benz.
Li Pumin stressed: "Mercedes-Benz is a monopolistic behavior, and is currently investigating and collecting evidence." China Securities Journal reporter called Mercedes-Benz (China) public relations relations and media communications director Guan Shaoqing, but as of press time, has not yet received an official response from Mercedes-Benz.
The National Development and Reform Commission’s anti-monopoly investigation of automobiles and accessories began at the end of 2011 and has suddenly increased its efforts since this year. At present, the investigations of the NDRC and other departments focus on the definition of the whole vehicle price of imported automakers and the price and maintenance price of spare parts for 4S shops. The purpose is to eliminate “tribal acts such as horizontal restrictions, vertical restrictions and abuse of market dominance”.
A person in the auto industry revealed that the current high-priced imported high-end cars have tax and tax factors, including 25% import tariffs, and imported cars with a displacement of 3.0 liters or more are subject to a 25% consumption tax. However, due to the tax factor, the sales prices of similar models in China and overseas are still very different. This price difference is particularly prominent in spare parts, and has become an important channel for OEMs to profit. According to the current "rules", car companies do not allow parts suppliers to sell original parts to the outside, only to the whole vehicle manufacturers, and 4S shop can only enter the parts from the whole vehicle manufacturers. By monopoly accessories sales channels, auto companies can obtain high profits.
Parts and accessories will fall in price tide Under the high pressure of the NDRC's anti-monopoly investigation, some high-end luxury car brands intensively announced that the price of complete vehicles, accessories or maintenance has dropped sharply.
At the beginning of July, Mercedes-Benz announced the "Star Emblem Maintenance Menu", which clearly stipulated the price of A, B and maintenance parts. The price of the maintenance menu dropped by more than 20% compared with the previous package. Jaguar Land Rover announced that from August 1st, the factory guide price of the Land Rover Range Rover Extended Edition, Land Rover Range Rover Sport 5.0 V8 and Jaguar F-TYPE Convertible version of the model has dropped sharply, with the highest drop of 300,000 yuan. FAW-Volkswagen Audi announced that it has lowered the price of original accessories for domestic models since August 1. Take the Audi A6L as an example. After this adjustment, the “zero ratio” of the model will be reduced from 411% to 291%. Subsequently, Mercedes-Benz (China) announced that it will reduce the price of some repairs and accessories from September, in response to the National Development and Reform Commission's price supervision and inspection and anti-monopoly bureau's anti-monopoly investigation of the domestic auto industry. The price adjustment of repair parts will cover Mercedes. All models of the Benz-Benz include more than 10,000 accessories.
With the NDRC's investigation covering many brands in Japan, Europe and the United States, the trend of adjusting the price of cars, accessories or maintenance under the high-end luxury car brand will continue. After all, the control of imported car sales channels and spare parts supply channels in Japan, Europe and other car manufacturers. It is ubiquitous.
The aforementioned auto industry pointed out that with the introduction of anti-monopoly investigation results and penalties, the sales behavior of the auto industry will be further regulated in the future, and some "hidden rules"-style sales methods will converge. At present, the domestic imported car market not only has the problem of the high price of the whole vehicle and parts, but also often the manufacturers set the minimum retail price of automobiles, limit cross-regional sales, and forcibly tying to dealers.
A person in charge of China Import Automobile Trading Co., Ltd. believes that the decline in the price of luxury car brand spare parts will become the focus in the future, and the impact of the price reduction of the whole vehicle is limited. "The high price of domestic luxury cars is related to many factors. In the taxation, only 25% of the tariffs are required, and 17% of the import value-added tax and the consumption tax levied according to the displacement are required. The consumption tax is roughly based on the vehicle displacement. Between 1% and 40% floating. Considering the profit of auto companies and the cost of retail channels, it is unlikely that luxury car brands will cut prices significantly. The current price reduction policies of Audi and Land Rover will not bring much benefit to consumers."

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