Photo: BMW
It’s a known fact that if you want a BMW, Mercedes-Benz or Audi in China you’re out of luck. Not because they don’t sell over there but because the prices they have in the Asian country are borderline ridiculous.
To give you just an example, imagine that a BMW 6 Series Convertible, costs $97,900 in the US while buying it in China it will set you back around $320,000. In these circumstances, Chinese customers and luxury amateurs have decided to take matters into their own hands. Their solution: importing cars from the US.
The procedure was simple in theory. Someone would buy the car from a dealership in the US, sell it to a Chinese customer and then have it shipped over. Sure, it would take longer and cost a bit more than the purchase price on the North American continent but you’d still come out cheaper.
That’s something the big car companies are trying really hard to stop. The local legislation isn’t helping either as China just allowed dealers registered in Shanghai’s free trade zone to import cars without the consent of foreign car makers.
Such a move endangers profits for big manufacturers that have been milking this cash cow for quite some time now. Corroborated with the incredible gains China showed over the last few years, profits have skyrocketed.
With this new situation developing, they need to make sure things die down, as Mercedes is doing right now, according to Steve Cannon, the head of Mercedes-Benz USA.
In an interview, he said that Mercedes will penalize dealers who knowingly sell cars for such export purposes and that addresses of would-be buyers would be checked prior to selling the car. On top of that, cash payment for cars has been discouraged.
It seems to be working too if we’re to believe Cannon as such imports have gone down to almost nothing according to him. But what about pre-owned cars?
That could also be an alternative to buying a new car from China, and that’s even harder to keep track of. To top it all off, other car makers are having even worse problems in the communist country.
BMW, for example, recently had to pay its dealers in China around $800 million in compensation for slowing sales. That’s because the government allowed unauthorized dealers to sell cars as well, damaging the Bavarians’ business model. Couple that with the massive investments the Germans made lately and you’ll notice there are some dark clouds brimming above Munich right now.
The procedure was simple in theory. Someone would buy the car from a dealership in the US, sell it to a Chinese customer and then have it shipped over. Sure, it would take longer and cost a bit more than the purchase price on the North American continent but you’d still come out cheaper.
That’s something the big car companies are trying really hard to stop. The local legislation isn’t helping either as China just allowed dealers registered in Shanghai’s free trade zone to import cars without the consent of foreign car makers.
Such a move endangers profits for big manufacturers that have been milking this cash cow for quite some time now. Corroborated with the incredible gains China showed over the last few years, profits have skyrocketed.
With this new situation developing, they need to make sure things die down, as Mercedes is doing right now, according to Steve Cannon, the head of Mercedes-Benz USA.
In an interview, he said that Mercedes will penalize dealers who knowingly sell cars for such export purposes and that addresses of would-be buyers would be checked prior to selling the car. On top of that, cash payment for cars has been discouraged.
It seems to be working too if we’re to believe Cannon as such imports have gone down to almost nothing according to him. But what about pre-owned cars?
That could also be an alternative to buying a new car from China, and that’s even harder to keep track of. To top it all off, other car makers are having even worse problems in the communist country.
BMW, for example, recently had to pay its dealers in China around $800 million in compensation for slowing sales. That’s because the government allowed unauthorized dealers to sell cars as well, damaging the Bavarians’ business model. Couple that with the massive investments the Germans made lately and you’ll notice there are some dark clouds brimming above Munich right now.
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