High taxes, profits mean high prices for Chinese cars
- Source: Global Times
- [11:50 December 10 2009]
- Comments
The high prices of Chinese cars are mainly due to high taxes and high mark-ups resulting in big profits for car manufacturers, according to a Chinese Business News (CBN) report Wednesday citing analysts.
A previous report that Chinese cars are more expensive than US ones sparked concern among the public as to why Chinese cars are so expensive.
The article stated that although China's auto sales and output both top the world, Chinese cars on average are more expensive than American ones, reported Chinese Business News (CBN) Tuesday.
CBN data showed that for the same car, the selling price in the US was lower than in China.
For example, the Toyota Camry, which features 2.4-liter engine, was sold at 149,000 yuan ($21.281) in the US, and 199,800 yuan ($29,261) in China.
"The selling prices of Chinese cars are mostly dependent on competition, and the costs are just part of the reasons for the high prices," Jia Xinguang, a car expert said.
He pointed out that compared with the US and European markets, the stiff competition and the lack of organization make the Chinese market lag behind, and the profit margins of car manufacturers are much higher in China than in Europe and the US, he pointed out.
According to a report from Standard and Poor's in 2008, the average profit margin of a Chinese car manufacturer was between 30 percent to 45 percent, while the average profit margin in the western market was 5 percent.
Jia said that in the luxury car market for example, the Chinese market was basically divided between BMW, Benz and Audi, but the same cars in the US and Europe faced competition from other brands including Cadillac, Lincoln, Maserati and Jaguar.
