BMW and Daimler have raised prices of its popular cars in China, particularly in the high-margin sector. This is to cover the additional expenses incurred by the manufacturer because of the high prices of export tax imposed by the US on China.
The X5 and X6 SUVs, according to CNBC, has had their prices raised from 4 percent to 7 percent. This increase is due to the trade war. Indirectly affecting every other import coming in from foreign countries, this is a hint that BMW-and Daimler-is willing to absorb the extra cost by getting some of those costs offset by the additional price on the SUVs.
It is in retaliation to the US-imposed tariffs that Beijing issued a set of their own tariffs. As a result, imports coming to China has an additional 40 percent duty to pay. While BMW is still a proponent of free and global trade, it couldn't stand by without taking action to secure their profits-hence, the additional price on most of their SUVs.
Daimler, meanwhile, is facing the same problems as BMW. It ships in SUVs made in the US and, as a result, is facing the same extra duty tax to pay.
U.S.-based carmakers like BMW and Daimler, which has no plants in China, is facing the same problems, according to Bloomberg. Some carmakers, like Tesla, has already gone the extra mile by opening plants locally to supply the population with local-made models. Daimler, for its part, has decided to go to producing cars from knock-down kits-a common practice among manufacturers looking to avoid extra imposition of duty taxes.
BMW has already imposed additional pricing on the X5 and X6 SUV, but there is no word on what price impositions there will be on the X4. China is a market that BMW and Daimler cannot ignore; aside from the sheer number of the population being a big draw, there is also a big demand for crossover SUVs as the economy just keeps going up. Only last year, 100,000 vehicles from the US came into China as demand continued to surge.
While the additional price was only one way that BMW was trying to ease the impact of the trade tariff, the car manufacturers are still looking for other easier, price-sensitive ways.
