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Dealers raise discounts to spur luxury car salesMercedes-Benz and BMW cut prices on the mainland as slowing property and stock markets hit buyersBloomberg in Shanghai17 December 2011Mercedes-Benz and BMW dealers on the mainland offered bigger discounts on some models last month as slowing property and stock markets weighed on buying of luxury cars, according to a research firm.Average prices of Daimler’s basic Mercedes-Benz C200 at Chinese dealerships were 16 per cent below the manufacturer’s recommended price last month, compared with 14 per cent in October and 3.4 per cent in July, when the model became available, according to data from China Auto Market. BMW dealers sold the latest 320i car 11 per cent below the suggested price, more than triple the initial discount for the previous marque.Daimler, Bayerische Motoren Werke and Audi are looking to the world’s biggest car market to support sales as European demand sags on concern over the region’s sovereign debt crisis. A slowdown in China’s property and stock markets will probably undermine discretionary spending, according to Credit Suisse and BNP Paribas.“Competition is getting fierce, especially in the entry-level luxury car segment,” said John Zeng, a Shanghai-based director at researcher LMC Automotive Asia Pacific. “BMW, Mercedes and Audi are expanding their capacity in China and the majority of that capacity is used to make the entry-level models, and that’s increasing the competition.”Vehicle sales on the mainland have slowed from last year’s record 32 per cent increase as inflation, higher interest rates and the end of a two-year stimulus plan deter buyers.Deliveries for 2011 may rise the least in 13 years, according to the China Association of Automobile Manufacturers.Mercedes-Benz’s C200 sold at 292,800 yuan (HK$355,375) last month, compared with the recommended price of 348,000 yuan, according to China Auto Market, which surveys dealerships in Beijing, Shanghai, Guangzhou, Hangzhou and Chengdu.“There are phases when you offer customer discounts, like in the phase-out period,” Klaus Maier, Mercedes-Benz China chief executive, said on November 21 at the Guangzhou Auto Show. “But currently I feel comfortable.”Dealers offered 6.7 per cent off Volkswagen’s 2011 Audi A6L last month, against 1 per cent in January at its introduction, the data showed.BMW’s new BMW 5-series car, introduced last month on the mainland, sold at the recommended price of 797,600 yuan, according to the data.Audi and BMW did not respond to requests for comment.
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That's good news for those who want to buy luxury cars, as it will support the industry's production and movement in the stock market. Perhaps it would be better to front fuel-efficient models in order to encourage people even more to support the industry in these times of high fuel prices.
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