FAW-Volkswagen Lowers Prices of Spare Parts in China
Kizha Trovillas | | Jul 27, 2014 11:25 PM EDT |
(Photo : pictures.reuters.com)
FAW-Volkswagen Automotive Co Ltd. (FAW-VW) announced on Sunday that it would cut prices for its Audi AG brand's spare parts in China after the Chinese government started probing foreign auto industries.
Audi stated that the "proactive" adjustment of prices was allowed because of localization measures and economies of scales.
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The ratio of the overall retail price of Audi A6L's components to the complete vehicle's price will be at 291 percent from 411 percent. The change in ratio will lower the maintenance costs for the customers, Audi added.
The price reduction would range from 16 percent to 38 percent of its products, including gearboxes, various types of engine and car body parts.
The new prices for the spare parts will be implemented starting Aug. 1.
Audi's decision follows the statement of Tata Motor's Jaguar Land Rover on Friday that it would also implement price cutting for its three models in China in response to an investigation carried by the pricing and antimonopoly division of the country's National Development and Reform Commission.
"The NDRC's investigation into the local auto market recently triggered the price adjustment among foreign auto makers," the deputy of China Automobile Dealers Association (CADA), Su Hui, told a local news publication on Sunday.
"Audi and its joint venture FAW-Volkswagen support the efforts of the NDRC to examine the pricing in the after-sales area in China," the automaker said.
The country is bringing up efforts to take companies comply to its anti-monopoly law enacted in 2008. On the previous years, it has investigated industries such as milk powder producers, jewelers and technology firms.
According to Su, the healthy development of the country's auto industry is dependent upon the measures the government will issue based on the probe result.
The NDRC, which controls pricing activities, has been gathering evidence of a possible anti-competitive behavior by the country's auto industry.
The government, as well, has been collecting data on whether there's a monopoly inside China's vehicle market.
Tagsvolkswagen, audi, National Development and Reform Commission of China
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