Volkswagen Cuts Prices in China

SHANGHAI, March 16, 2007 Reuters reported that Volkswagen AG cut prices on several of its China-made cars by up to 11 percent, its Shanghai joint venture said, to promote sales in the fiercely contested market.

Shanghai Volkswagen, the auto maker's manufacturing venture with Shanghai Automotive Co., has reduced the prices of its Santana, Polo and other models by as much as 11,000 yuan ($1,420), it said in a statement late on Thursday.

The venture sold 65,000 cars in the country in the first two months of 2007, up 41 percent from a year earlier.

Rival Shanghai GM, General Motors Corp.'s tie-up with Shanghai Auto, shipped 67,500 cars during the period, up 39 percent.

Although China's auto market is growing strongly, boosting sales at most car makers, price competition has intensified as companies ramp up production capacity.

Earlier this year, GM cut prices by as much as 10 percent on several of its domestically made models, including the Chevrolet Lova and Aveo economy cars.