Major price cuts in luxury car brands

Lincoln has joined other automakers in announcing that they would cut the recommended retail prices of all Chinese car manufacturers. Mercedes-Benz, BMW, Volvo, Jaguar and Land Rover, have all announced price cuts of up to 85,000 yuan.

Logo of Lincoln. [File photo: IC]

The price reduction on the luxury car brands was triggered by China's recent announcement that value-added tax (VAT) rate for manufacturing industry will be cut.

According to its 2019 work report, the government will continue implementing larger tax cuts and fee reductions, with the aim of reducing corporate tax and social security contributions by nearly 2 trillion yuan throughout the year. Among them, deepening the reform of value-added tax will reduce the current 16% tax rate of manufacturing industry to 13%, and the current 10% tax rate of transportation and construction industry to 9%.

In the first two months of 2019, domestic car sales were around 3 million, with a 9.8% decreasing year-on-year. The wholesales of luxury brands fell by 4%. In February, luxury brands' wholesale sales fell 2% year on year, while retail sales fell 3% year on year.