combination of relaxed government rules and increasing competition has led to
recent Chinese vehicle price reductions, according to local reports.

Changan Suzuki Automobile Co. has cut the prices of its fuel-injected Alto
mini car series by an average of Rmb5,000 (US$605), said to be the biggest single
reduction since the car went on sale.

Cuts on the few carburettor engine Alto models still in the catalogue are less
steep but the range now costs from Rmb35,800 ($US4,325) to Rmb53,900 ($US6,510).

This means that, apart from the top-specification Kuaile Wangzi version, all
Chinese-made Altos are available for less than Rmb50,000.
And it’s not just Suzuki wielding the price-chopping axe.

Jilin and Merie – two relatively minor players in a fast-developing market
dominated by Volkswagen , recently lowered showroom tags after Beijing relaxed
price controls on passenger cars.

But Changan, which has a market share of nine percent, is the first of the
big names to do so.

The reports say that lower prices are also benefiting commercial vehicle buyers.

Nanjing Iveco Motor Co. (Naveco), has slashed prices throughout China with
a cut of Rmb10,000 ($US1,210) on its A40 series and Rmb5,000 ($US605) for the

Officials said the price cuts followed mobile phone and colour television giveaways
used to lure buyers to Iveco showrooms in April.

The price cuts and free gifts are largely for the same reason often cited in
the West – Naveco sales were down 12 percent in the first four months of
this year.

And it is sweetening the deals even more. Despite cutting prices, it will soon
add power steering and anti-lock brakes to its light truck range.

To view related research reports, please follow the links

in China: A Market Analysis

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