Photo: BMW
It's been almost 7 years since China implemented a luxury tax on cars priced above 1.7 million yuan ($275,000) and the officials are getting closer to a final decision these days.
In case a new tax will be enforced, all the cars with price tags between 1.7 million and 1.8 million yuan ($275,000 to $290.000) will be eligible for an additional 20% luxury tax. That could mean trouble for BMW, whose cars are pretty expensive already in China.
Some of the Bavarian manufacturer's cars do fall into that price gap and they might become less popular as time goes on. Since China recently became the largest car market in the world, this is extremely bad news for BMW.
"The Ministry of Finance, State Administration of Taxation and other relevant departments are currently in the process of researching [the policies]," a source for Gasgoo commented.
This new tax will not only affect BMW branded cars but also other important manufacturers like Audi and Mercedes-Benz that have cars in the same segments and with similar price tags.
However, considering that the total number of cars within this margin is limited to around 5,000 units per year, analysts consider the new tax will not have such an extensive effect on the market, as most people anticipate.
"Sales and production numbers in the Chinese automobile market are the highest in the world, but vehicle prices are not developing alongside other developed markets," said Mr. Zhang Zhiyong, Industry Analyst for Gasgoo.com
Via: Gasgoo
Some of the Bavarian manufacturer's cars do fall into that price gap and they might become less popular as time goes on. Since China recently became the largest car market in the world, this is extremely bad news for BMW.
"The Ministry of Finance, State Administration of Taxation and other relevant departments are currently in the process of researching [the policies]," a source for Gasgoo commented.
This new tax will not only affect BMW branded cars but also other important manufacturers like Audi and Mercedes-Benz that have cars in the same segments and with similar price tags.
However, considering that the total number of cars within this margin is limited to around 5,000 units per year, analysts consider the new tax will not have such an extensive effect on the market, as most people anticipate.
"Sales and production numbers in the Chinese automobile market are the highest in the world, but vehicle prices are not developing alongside other developed markets," said Mr. Zhang Zhiyong, Industry Analyst for Gasgoo.com
Via: Gasgoo
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