Business / Auto China

Year of Horsepower: Car industry shifts gears

By Li Fangfang, Xu Xiao and Li Fusheng (China Daily) Updated: 2014-02-10 07:21

Tesla Model S priced lower than expected

Year of Horsepower: Car industry shifts gears

A Tesla Model S electric car is pictured on Feb 5, 2014 in the company's Beijing store. [Hao Yan / chinadaily.com.cn]

Defying speculation that its Model S electric car would be priced at more than 1 million yuan in China, US manufacturer Tesla announced on Jan 22 that the model would sell for 734,000 yuan.

It also released a transparent pricing system as an effort to differentiate itself from competitors, some of which were accused of trying to make excessive profits on imports last year, according to the company.

In March, a month dedicated to protecting consumer rights, some automobile brands were identified as having unreasonable prices and generating excessive profits from their imported vehicles.

Later in August, the China Automobile Dealers Association announced that it started an investigation into the pricing of foreign car brands in China, covering costs, profit margins and taxes.

However, the probe goes with no further news so far.

Analysts said that the high prices of foreign-brand vehicles, especially imported vehicles, have drawn a lot of attention in recent years, as prices of some are two and a half times what they are in the United States and Europe.

According to a report on the Wall Street Journal, listed prices of luxury cars in China are on average 64 percent more expensive than similar vehicles sold in the US based on a comparison of three models - the Mercedes-Benz C-Class, Audi A4 and the BMW 3-Series.

Even without consumption taxes and value-added taxes, prices of those three models are still 37 percent higher in China on average.

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