Audi joins the ranks of “government officials”. What is the “price war” for luxury cars?

On May 1, the Joint Taxation Administration of the Ministry of Finance issued the Notice on Adjusting the VAT Tax Rate. The notice required that “taxpayers should use VAT taxable sales practices or imported goods, and reduce the 1% benchmark points respectively”. On the second day after the “notice” was issued, the series of luxury brands responded by announcing the reduction of their official guidance prices.

Luxury brand "price war" started, Audi offers "combination punch" attack

It is reported that, following the pace of this tax reform, Mercedes-Benz took the lead in issuing "Guan Jiang" information. Subsequently, Jaguar Land Rover, Lincoln, and BMW followed suit to release the "Guan Jiang" news, and the price cut ranged from a few thousand yuan to a million yuan. In a moment, a "price war" initiated by a luxury brand is ready to come.

A week after the release of the above-mentioned luxury brand “Guanjiang” information, on May 10th, as the “big brother” of the luxury car market, Audi also released the news “Guan Guan”. According to the FAW-Volkswagen Audi official, the opening of the "government down" is not entirely in response to the country's value-added tax reforms, but it is thanks to Audi's 30 years of entry into China to better support Chinese users in their continuous support.

It is reported that FAW-Volkswagen Audi's "government down" involved models including the sale of imported cars and domestic cars, the price reduction ranged from 1300 yuan to 18,200 yuan. From FAW-Volkswagen Audi's list of price reductions for vehicles sold, we can clearly see that the price cuts of domestically-selling models are relatively limited, such as the Audi A6L, which has dropped by 3,200 yuan, and the Audi A4L, which has dropped by 2,800 yuan; At the same time, some of the imported models have experienced large decreases, such as the Audi RS 7 Sportback models, which fell between 11800-13200.

Unlike other luxury brands that only opened "Guanjiang", Audi also launched a series of discount packages. In addition to the above mentioned "government down", FAW - Volkswagen Audi's preferential action also covers financial policy, used car replacement, pre-sales service and other fields. Among them, the financial incentives include: the lowest level of the imported models of the entire system is 0-period interest rate of 0; some domestic models can enjoy a minimum of 18-period zero interest rates, as well as a variety of vehicle financing fees such as “purchase tax”.

Behind the decline of luxury car officials: put down their postures, showing Chinese consumers

Actually, when we look at the luxury brand collective “downhill” caused by the tax reform, we find that whether it is the first luxury brands such as Mercedes-Benz, Jaguar Land Rover, Lincoln, and BMW, or the late Audi, its “decline "The range is from a few thousand to ten thousand yuan. Among them, the Mercedes-AMG model had the highest drop of more than 32,000 yuan, while the Jaguar Land Rover model had the highest drop of 20,000 yuan. In response to this situation, we cannot help but ask: Can such an official decline affect the end market?

Gasgoo has conducted a survey on this issue, and most readers believe that corporate officials have little influence on terminal market prices, because dealers tend to give preferential rates for terminals when market competition becomes more and more severe. This is even more significant than the "downfall" of the company. The industry believes that the reason why luxury brands are so high-profile to reduce the official guide price of their products, is nothing more than in the fierce market competition, put a "high cold" of the figure, in a more people-friendly attitude to the Chinese consumer "shows".

Of course, as the earliest luxury brand to enter the Chinese market, Audi is deeply versed in the psychology of Chinese consumers. On the occasion of the 30th anniversary of China’s entry into China, it has played a “combination boxing” in which “government down” and various kinds of preferential activities are superimposed. It shows its emphasis and sincerity on the Chinese market.

In addition, at the Boao Forum for Asia held in April this year, the Chinese government announced that it will open wider to further reduce tariffs on imported cars. Although the current reduction in import tariffs has not yet been announced, it is reported that tariffs on imported cars in the future are expected to be further reduced from the original 25% to 15%.

Another voice believes that if the tariff of imported cars is reduced by 10% or 15%, then the domestic luxury car market price will be further explored. Some ultra-luxury car brands that rely on imported products to survive are expected to have current prices and current prices. Achieve domestic first-line luxury brand products prices are similar. For example, Macan, the best-selling SUV model of Porsche, has an official guide price of 588,000 yuan for its current entry-level model. If the import tariff is reduced to 15%, its official guideline price is expected to be reduced by 10% to around 520,000 yuan. It will seize the market where the first-line joint venture models such as Mercedes-Benz GLC and BMW X3 are located.

Therefore, before the tariff reduction on imported cars, all first-tier and even second-tier luxury brands have lowered their official guidance prices. The purpose is also to open up the price gap with ultra-luxury branded products based on imports. At the same time, it also uses a more people-friendly attitude to sink sales channels and reach a wider audience.

There is no doubt that under the surging tide, the Chinese auto market will enter a new round of competition.

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