The Land Rover car was priced at 835,000 yuan in the UK and sold for 3.2 million yuan in the China market.

A Land Rover is priced at 835,000 yuan in the UK, but it needs 3.2 million yuan to buy it in China.

Why do imported cars sell more and more expensive? (Window)

Tao hong cheng hui

When people buy imported cars in China, they may have to face a price that is twice or even several times higher than that of foreign countries. Many factors, such as high taxes, channel monopoly and face-saving consumption concept, have pushed imported cars to the altar of high prices. After the liquid crystal panel, milk powder and gold jewelry were issued with anti-monopoly tickets, the voice of anti-monopoly investigation on imported cars is getting higher and higher.

What is the price of imported cars? Besides tariffs, what other factors affect the price of imported cars? Let’s go to the imported car market to find out.

-editor

1. Is high tax rate the biggest culprit?

Tariffs are not the only reason. Suppliers and dealers are relatively strong, and some consumers are willing to pay the bill, which has jointly pushed up the price of imported cars.

In a Land Rover 4S shop in Chaoyang District, Beijing, we met Zhan Ping, a consumer who came to see the car.

According to him, the Land Rover Range Rover he took a fancy to respected the Genesis Edition. At present, the domestic price is 2.798 million yuan, but due to the limited supply of dealers, it is necessary to increase the price by 400,000 yuan if you want to withdraw the car! In other words, it takes 3.2 million yuan to buy this car. In the UK, the home base of Land Rover, the price of this bare car is only 835,000 yuan, less than 1/3 of that of China.

Why is there such a big price gap between home and abroad for the same car?

We consulted the sales staff of Land Rover’s 4S store and called the official customer service of Land Rover (China), and the replies were all due to the huge import tariffs and other additional taxes levied in China.

Is this really the case? It is understood that imported cars have to pay three kinds of taxes and fees when they enter the China market: customs duty, consumption tax and value-added tax. According to WTO regulations, China’s automobile import tariff rate is 25%, the value-added tax rate is 17%, and the consumption tax is divided into seven grades according to the displacement, with a maximum levy of 40%.

Take the above Land Rover Range Rover Respect Creation Edition as an example. We roughly calculated that the price of its bare car in the UK is 835,000 yuan, which is the CIF price in China. The displacement of this car is 5.0T, and the corresponding consumption tax rate is 40%. The price of this car after tax payment is about 2,035,300 yuan, which is more than twice the price in the UK. The high tax rate is indeed an important reason for the high price of imported cars.

However, the price tag is 2.798 million yuan, which is more than 700,000 yuan different from the after-tax price. Although it includes the cost of channel providers, the difference is too big. No wonder consumers question the huge profits in the imported car market.

Why can imported cars be sold at huge profits and high prices? Jia Xinguang, executive director of china automobile dealers association, said that in 2005, the Measures for the Implementation of Automobile Brand Sales Management jointly issued by the Ministry of Commerce, the National Development and Reform Commission and the State Administration for Industry and Commerce granted the imported automobile manufacturers the right to set up a subsidiary in the China market or establish sales channels with the general agent system. This means that suppliers have the highest dominant position in the whole circulation channel, and have the right to set prices and the control of dealer quotas.

The high operating cost and limited quota make dealers not satisfied with the profit under the official pricing, and it has become the normal state of the automobile market to increase the profit by increasing the price. The connivance and acquiescence of manufacturers to dealers’ price increase behavior has intensified the wind of price increase.

Dealers often use the limited quota as an excuse, saying that if they want to buy a car, they must increase the price, ranging from 20,000 yuan to 30,000 yuan. Take Land Rover Range Rover respecting Genesis Edition as an example. Since its listing, the lowest fare increase is as high as 400,000 yuan.

Jia Xinguang analyzed that in addition to taxation and channel control factors, the blind enthusiasm of consumers has further promoted the price of imported cars to be higher and higher.

Although buying imported cars in China is twice or even several times higher than that in foreign countries, many consumers are still willing to pay for it. "Although imported cars are a little expensive, they have more face when driving." Zhan Ping said that some imported cars are in short supply, and they may not be available at a higher price. At one time, the Land Rover Range Rover Zun Chuang Shi Edition was sold out. Some consumers are willing to pay for the "unreasonable" price increase of dealers, which in turn encourages the arrogance of dealers to increase prices.

2. Is channel control suspected of monopoly?

At present, there is no factual evidence, but the supplier has the highest dominance, which creates an opportunity for channel monopoly.

There has always been a dispute over the alleged monopoly of imported car manufacturers by limiting prices and controlling quotas. Then, does the channel control of the imported car market violate the Anti-Monopoly Law?

According to lawyer Liu Cheng, a partner of Beijing King & Wood Law Firm, China’s Anti-Monopoly Law strictly prohibits operators from abusing their dominant market position, eliminating restrictions on competition, and also prohibits suppliers from reaching agreements with distributors to fix the retail price of products or limit the minimum retail price.

Liu Cheng said that to judge whether the pricing and sales of imported cars constitute a violation of the Anti-Monopoly Law, many factors need to be considered, such as the share of imported cars in the domestic automobile market, whether imported cars are irreplaceable, whether the imported car market is closed, etc., and it is not possible to arbitrarily conclude that they violate the Anti-Monopoly Law just because there is a price limit.

Professor Liu Jifeng from the School of Civil and Commercial Law of China University of Political Science and Law also believes that the violation of the Anti-Monopoly Law cannot be determined by the high price alone, and many factors such as market structure and consumption situation need to be analyzed. At present, there is no factual evidence to determine.

Then, why has this criticized problem never been investigated and collected by the relevant departments for many years, and it has been rectified and improved? Jia Xinguang said that it is not only because of the complicated interest distribution behind it, but also because of the loopholes in the existing automobile market policy.

According to the "Measures for the Implementation of Automobile Brand Sales Management", a single model based on 4S stores is implemented in the field of imported automobile circulation and distribution services. According to the terms, the imported automobile manufacturers have full control over the selling prices of dealers and the quotas of dealers by setting up branches or authorizing exclusive agents in the China market, and the policy loopholes give the imported automobile manufacturers the highest dominant position.

Jia Xinguang believes that when the "Measures for the Implementation of Automobile Brand Sales Management" was promulgated, the domestic imported car market had just started, and the "Measures" really played a positive role in regulating the market. However, after eight years of development, the domestic automobile market has matured, and the "Measures" have become the "umbrella" for imported automobile manufacturers to monopolize channels.

Suppliers not only control the pricing power and quota control of automobiles, but also control the spare parts supply and after-sales maintenance of imported automobiles. The price of imported cars is not only high, but also the price of spare parts is abnormally high. According to a salesperson of an Audi 4S shop in Chaoyang District, Beijing, an Audi vehicle with a price of 400,000 yuan can be sold for 800,000 yuan if it is disassembled into spare parts.

The general agent stipulates that imported car spare parts are only sold through 4S stores and do not flow into the auto parts city. Consumers can only accept the high-priced spare parts of 4S stores.

The policy gives the general agent the final say, which is obviously in contradiction with China’s Anti-monopoly Law. Yang Dong, an associate professor at the Law School of Renmin University of China, said that from the perspective of the Anti-monopoly Law, suppliers’ actions of collecting the deposit for building stores, fixing prices, controlling quotas and selling spare parts from dealers are obviously not in line with the relevant provisions of the Anti-monopoly Law.

3. How do imported cars bid farewell to high prices?

To fill the policy loopholes in sales channels, we should actively adjust the tax structure of imported cars and guide car buyers to spend rationally.

Jia Xinguang believes that in order to break the high-priced situation of imported cars and let them go down the high-priced altar, we must first make a difference in policy.

The loopholes in the "Measures for the Implementation of Automobile Brand Sales Management" give a green light to the control channels of imported car suppliers, but make consumers bear a heavier burden and the protection of rights and interests lights up a red light. "To change the status quo that suppliers are dominant and dealers increase prices unreasonably, we must first fill policy loopholes."

On August 23, the Ministry of Commerce responded that it is working with relevant departments to revise and improve the "Measures for the Implementation of Automobile Brand Sales Management" and will impose necessary restrictions on suppliers in terms of collecting store-building deposits and tying up stores. And suppliers will be punished for price monopoly.

"In addition to rectifying channels, we should also start from two aspects: adjusting the tax structure of imported cars and guiding consumers to spend rationally." Jia Xinguang said.

In terms of taxation, the tariff rate of imported cars in China is 25%. Compared with the tariffs of imported cars in foreign countries, such as 2% in the United States, 0% in Japan and 8% in South Korea, it is not difficult to find that the tariff rate in China is significantly higher than that in other countries.

China sets relatively high tariffs on imported cars, aiming at restricting the purchase of imported cars and promoting the development of domestic independent brands. In fact, because imported cars are mainly for high-end consumer groups, domestic independent brands are mainly for low-end consumer groups. After the price of imported cars was raised, many high-end consumers did not turn to buy domestic independent brands, but turned their attention to joint venture cars in between.

On the other hand, due to the existence of luxury and comparison, cars are not only a means of transportation, but also a symbol of status, identity and taste. From the annual sales volume of 30,000 to 40,000 vehicles 10 years ago to more than one million vehicles in 2012, imported vehicles with high tax rates are still popular among some domestic consumers, and the sales volume keeps growing at a high speed.

He Qiuhui, an auto analyst, believes that some consumers’ extravagant consumption habits and vanity mentality make the dealer’s "unreasonable" fare increase dignified and justified, and the price of imported cars is relatively high, so they can only say that one is willing to fight and the other is willing to suffer. "If consumers can abandon irrational consumption behavior and the buying fever comes down, the most expensive phenomenon of imported cars in the world is expected to end."

Extended reading

Compare the internal and external prices of luxury cars

Car prices are different inside and outside. What is the price difference between luxury cars currently on the market at home and abroad? Recently, the author compared some of these brands:

According to the different displacement and configuration, the domestic quotation of BMW X6 is 860,000 to 2.16 million yuan, and the overseas quotation is equivalent to 390,000 to 540,000 yuan; The domestic quotation of Mercedes-Benz S550 is 1.64 million yuan to 3 million yuan, and the overseas quotation is equivalent to 660,000 yuan to 800,000 yuan; The domestic quotation of Land Rover Range Rover 5.0 is 1.49 million yuan to 3.39 million yuan, and the overseas quotation is equivalent to 640,000 yuan to 840,000 yuan;

The Touareg in the United States is 3.6, and the price in the United States is 44,500 US dollars, which is equivalent to 295,400 yuan. After crossing the ocean to China, it sells for 780,000 yuan, which is equivalent to 264% of the price in the United States.

Cayenne 36, 45,500 dollars in the United States, about 302,100 yuan, sold 886,000 yuan in China, equivalent to nearly three times that of the United States;

Land Rover found that the price in the United States was 47,200 US dollars, about 313,400 yuan, and it sold 1.188 million yuan in China, equivalent to 332% of the United States;

The new Audi Q7 with a displacement of 3.0T sells for only 78,000 Canadian dollars in Canada, which is about 460,000 yuan. The price in the United States is $60,000, and the normal price after tax payment is less than 750,000 yuan; The domestic price is about 1 million yuan more expensive than that of Canada after it claims to be a big discount;

Audi A6 model, the US price is equivalent to 258,200 yuan to 348,500 yuan, and the price in China is 383,000 yuan to 742,600 yuan;

Volkswagen Tiguan, the price in the United States is equivalent to 140,700 yuan to 223,500 yuan, and the price in China is 199,800 yuan to 315,800 yuan, and this model is still being sold at a higher price.

(Guo Wei finishing)