China's Changan Suzuki JV Cuts Car Prices By Up To 12.5%

SHANGHAI January 8, 2003; Ramoncito dela Cruz writing for Dow Jones reports that Chongqing Changan Automobile Co. , a major Chinese vehicle and engine maker, said its joint venture with Japan's Suzuki Motor Corp. is reducing car prices by as much as 12.5% effective Thursday.

The move is expected to trigger another round of price cuts in an increasingly competitive domestic car market.

Chinese car makers have been slashing car prices since last year in reaction to lower tariffs on imported cars following China's entry to the World Trade Organization in December 2001. They are also trying to snare market share as foreign car giants expand and market their products more aggressively.

Chongqing Changan said its venture is reducing the prices of Alto and Gazelle cars by between 3,000 yuan ($1=CNY8.28) and CNY12,000, or between 6% and 12.5%.

Chongqing Changan said the price cut has been factored into its 2003 financial forecast. It didn't elaborate.

Chongqing Changan Automobile has A and B shares listed on the Shenzhen stock exchange.