Bayerische Motoren Werke AG (BMW) is to become the latest luxury carmaker to reduce prices of spare parts in China. The decision of the company places it among other auto makers such as the Audi brand of Volkswagen AG and the Mercedes-Benz brand of Daimler AG, which have also decided to reduce prices in the middle of an antitrust investigation.
The Germany-based company said in its statement, which was cited by the Wall Street Journal: “The pricing and antimonopoly division of the National Development and Reform Commission has paid close attention to problems in Chinas auto industry and after-market service sector.” As reported by Reuters, the company also said: “Recently, NDRCs Price Supervision and Anti-Monopoly Bureau expressed great concerns over problems in the auto industry and the after-sales market. BMW has been paying close attention, and in response, is making the effort to bring down wholesale prices and promoting the flow of original parts.”
BMW made an official statement and revealed that it is to cut prices of more than 2 000 spare components by an average of 20%. The price change is to take effect on August 11th. According to the auto manufacturers statement, dealerships have been authorized to set up more outlets in large Chinese cities.
Currently, China is considered as the biggest auto market in the world. The country has become an object of close examination and evaluation when it comes to the vehicles and spare parts charges of foreign auto manufacturers.
Earlier in 2014, the company has reduced the prices of more than 3 300 spare parts, including engines and electrical products by an average of 15%. Bayerische Motoren Werke AG explained that the price reduction is an “active response” to the National Development and Reform Commission (NDRC), which is the top price regulator in China.
On Wednesday this week, the National Development and Reform Commission announced that it would punish the Audi brand of Volkswagen AG and the Chrysler brand of Fiat SpA for their anti-competitive practices, and revealed that the fines could amount to up to 10% of their annual revenues generated on the territory of China.
Bayerische Motoren Werke AG was 0.5% down to trade at €85.77 per share by 10:59 GMT, marking a one year change of +19.66%. According to the information published on the Financial Times, the 31 analysts offering 12-month price targets for Bayerische Motoren Werke AG have a median target of €100.00, with a high estimate of €123.60 and a low estimate of €82.00. The median estimate represents a 16.01% increase from the last price of €86.20.
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