PEKING (Reuters) – German carmaker BMW ( BMWG.DE ) said it will increase the prices of two US-produced crossover SUVs in China to offset the additional cost of US tariffs cope with car imports in the largest car market in the world.
FILE PHOTO: The BMW logo can be seen on a vehicle at the New York Auto Show in Manhattan, NYC, New York, USA, on March 29, 201
In a move scheduled to take effect on Monday, BMW said in a statement to Reuters over the weekend that it will deliver popular, relatively high-marginal X5 and X6 SUV manufacturers-proposed retail prices Models increased by 4 percent to 7 percent.
The growth rates suggest that BMW is prepared to absorb much of the higher costs associated with the launch of the SUVs from its South Carolina plant to China, underscoring the fierce competition among luxury car brands in China.
BMW's decision comes after China introduced new tariffs on imports of US $ 34 billion earlier this month, from soybeans and cars to lobsters, as part of a growing retail chain.
Beijing, which lowered tariffs on all cars imported to China this year, hit an additional 25 percent on US-made cars on July 6. As a result, China now levies a 40 percent import tariff on all imported cars United States.
"BMW is free (trade) but can not stand still without taking action to respond to market changes," a BMW spokeswoman said in an e-mail message to Reuters.
BMW imports X4, X5 and X6 crossover SUV models from the US for sale in China, where demand for SUV is booming. Last year, the German automaker shipped more than 100,000 vehicles from the US to China.
The company has not made any reference to the pricing of its X4 model.
BMW's decision to absorb much of the impact of higher tariffs corresponds to an earlier move by the US automaker Ford Motor Co ( FN ), which does not want to increase its business momentum for now ,
China-based car dealers told Reuters that German rival Mercedes Benz, operated by Daimler AG ( DAIGn.DE ), mid-July, moderately increased the price of its GLE, a sporty mid-size SUV have the state of Alabama in China.
A Daimler spokeswoman told Reuters last week on company statements.
Daimler CEO Dieter Zetsche said last Thursday that automakers are looking for ways to mitigate the effects of the trade war. This would include a review of whether some US production should be relocated to China.
Daimler also said last week that pre-tax profit in 2018 will decline from a year earlier, as new Chinese import tariffs would affect sales of Mercedes-Benz SUVs.
coverage by Norihiko Shirouzu; Edited by Richard Pullin