CHINA: Brilliance China cuts sedan prices to shift old stock
Brilliance China Automotive Holdings Ltd has cut the price of older versions of its mid-range sedans in an effort to clear unsold stock after their sales tumbled over the past two months, Dow Jones reported.
The report said the company cut the price of the manual-transmission version of its 2.4-litre domestic brand Zhonghua sedan by 5% to 178,800 yuan from CNY188,800 and dropped the price of the 2.0-litre sedan 7% to CNY157,800 from CNY169,800.
According to Dow Jones, chairman Wu Xiao An said in late April the minibus maker felt no pressure to cut prices this year but, after reaching a high of 3,601 units in February, sales of Zhonghua sedans plunged 40% month on month in March and a further 20% in April.
A spokeswoman for Brilliance China told Dow Jones Newswires the price cut, the first this year, won't be repeated as it is aimed merely at clearing stocks of older cars to make way for the introduction of new models.
"We are only offering a one-off discount to clear the inventory of more than 1,100 units of the existing manual version. The enhanced manual version will revert back to the old prices," she told Dow Jones, denying the price-cut move is a response to sluggish sales. The fall in sales was mainly due to potential customers preferring to wait for the introduction of new automatic-transmission versions later this year, she reportedly said. "We don't see pressure to cut prices," she said, adding the new automatic version of the 2.0-litre Zhonghua sedan has been priced at CNY188,600, close to the pre-discount prices of the manual version of the more powerful 2.4-litre model.
The spokeswoman added that the 2.4-litre automatic will be available from October and will likely be priced higher than the manual version, but below CNY200,000, according to Dow Jones.
The news agency noted that, with demand damped by the SARS outbreak, Brilliance China has sold just over 6,000 minibuses so far this month, compared with sales of more than 7,000 units in March and more than 8,000 in April.
After two months of weakening sales in March and April, the company has sold just over 2,000 Zhonghua sedans so far in May, the report added.
Brilliance China is maintaining its full-year sales target of 30,000 to 35,000 Zhonghua sedans for 2003, the spokeswoman told Dow Jones, as well as the aggregate sales target of 100,000-105,000 vehicles overall.
HSBC Securities analyst Maurien Yau told Dow Jones the company has to find ways to maintain its first-quarter momentum, when it recorded sedan sales of 2,500 units a month on average, for the remainder of 2003. Unless it does this, it will miss its full-year target.