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BMW Hikes Its Prices Owing To The Ongoing Trade War

BMW will be the first car manufacturer to increase the prices of US-made automobiles sold to China due to the global economic trade war which will hit customers. The Chinese Government has imposed heavy tariffs on goods imported from the U.S as the U.S President Donald Trump did same for the Chinese goods imported by U.S. This has affected the German carmaker which will hit the sales of BMW in China. BMW is the largest exporter of vehicles to China. It produced about 371,316 cars last year, out of which 70% were exported to other countries. From today, BMW will increase its X5 & X6 model prices by 4–7% in China due to increased tariff rates. So far, only Tesla has increased their vehicle prices in a Chinese market. Tesla announced a rise of about 20% for its S & X model due to increased tariffs.

 Beijing has reduced import tariffs on automobiles to 15% from initial 25% on July 1, but later on, it increased the tariffs on vehicles manufactured by the U.S to 40% from 15% due to Donald Trump’s increase on import taxes of Chinese goods worth $50 billion. The X4 model price will remain same as it will start producing it in China soon, BMW says. BMW along with its rival Daimler will face big problems in selling vehicles to the biggest vehicle market of China as they had put a lot of money in production over so many decades.

A very less tariff of 15% is imposed on Audi, Maserati, and Porsche group car manufacturers as they have their manufacturing plants located in Europe. The Jefferies Analysts said that the import tariffs have caused big threat for sector earnings which will cause many problems for Daimler and BMW as it will reduce the total earnings of those companies by 4–5%.

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