BMW X5 Prices More Than Double When Sold In Chinese Market

SHANGHAI - September 4, 2007:

Many luxury cars sell for much higher prices in China than in Europe or the United States. BMW X5, which will go on in China this month, is one example.

The estimated price of BMW X 3.0si is about $44,232 in the United States, but the same car model is sold at 8900,000 yuan ($118,666) in the Chinese market.

“When a car is imported to China, the customs will levy a 25 percent import tax, a 17 percent value-added tax and a 3-20 percent consumption tax. All these taxes, which are based FOB price, will add 80 percent to the FOB price,” said Li Li, manager from China Trading Center for Automobile Import.

According to China’s car import regulations, foreign carmakers must have a chief wholesales representative, which will take 10 percent of the import car prices (FOB plus all tax). In addition to the chief wholesales representatives, there are many local sales representatives who take about 13 percent from the car prices, Li said.

Typically, when a car is imported to China, its markets price will be doubled or even higher than its FOB price, Li said.

Similarly, the Estimated Market Price of 2008 Mercedes-Benz S-Class S 64 is about $172,878 in the United States, but it sells 2.98 million yuan in China ($397,333). The price is more than doubled in the Chinese market than in the US market.

For more information about the burgeoning auto industry in China please visit http://www.gasgoo.com/Autobiz/list/7/China-News.html