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Nov
2014

Government policy begins to drive the price of new vehicles lower

You will have read in previous issues of Luxury Insights China about the price of luxury cars and the government regulations that were not well thought through, that have in fact been the reason that prices were allowed to be so high. Put simply, the regulations that were meant to protect the market meant that the manufacturers were allowed to control the import and sales process from end to end. The result being higher end user prices as vehicle brands added a margin to every step of the process, pocketing large profits as a result.

Recent discussion indicates that the government is about to change the rules that affect both import and servicing that will potentially both open up the market or force the big players to drop their retail and maintenance pricing. There is talk that new regulations will allow vehicles to be legally imported through approved grey channels thus avoiding the official importation organisations belonging to their car brands, and as a result their additional margin that is passed onto the customer. ….

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