(Yicai Global) March 19 -- Volkswagen is among a raft of car brands rushing to cut prices in China in response to a reduction in value-added tax in the country.
The joint venture between the Wolfsburg-based car giant and FAW Group has slashed official guide prices for models effective today, state-backed news outlet The Paper reported.
Premier Li Keqiang announced that VAT for manufacturers would fall 3 percentage points to 13 percent in a speech on March 5, while that of transportation, construction and other industries would shrink to 9 percent from 10 percent.
FAW-Volkswagen's price list covers all Audi models on sale in the country, with the largest reduction coming in at CNY55,000 (USD8,185), according to a statement from the Changchun-based JV. Retail prices are determined by the unit's authorized dealers in line with relevant government regulations.
The move follows similar cuts by other high-end foreign car brands in the country.
Beijing Benz, the JV between Daimler and BAIC Motor, announced price cuts of up to CNY64,000 on Mercedes and Smart car models on March 15. The Munich-based carmaker will also lower prices of BMW and Mini models from its JV with Brilliance Auto by up to CNY60,000.
British luxury carmaker Jaguar Land Rover Automotive will lower suggested retail prices of all models sold in China by a maximum of CNY85,000, according to a statement on March 16.
On the same, day, Volvo Car Sales also cut suggested prices in the country for its motors. The Swedish firm's flagship sports utility vehicle, the XC90, will see the biggest price fall at CNY60,000.
US brand Lincoln also lowered suggested prices for all models on March 17.
Editor: William Clegg