China's tariff reduction excites foreign carmakers

Foreign carmakers commented positively after China announced decision to lower tariffs on imported cars.

"All the undelivered cars will be priced in line with the latest import duty irrespective of the time for customs clearance, and some inventories are available now at the adjusted prices," Tesla said in a statement.

On Tuesday, Tesla took the lead in reducing prices for Model S and Model X in the Chinese mainland as a response to tariff reduction. The intended cuts will reduce the final price of imported cars by 8 percent to 15 percent, predicted CITIC Securities.

The Model X 75 D for example was sold out immediately at an experience store in Shanghai after its price was reduced by over 70,000 yuan, The Paper reported.

Volvo cut the price of its imported cars as well to attract more customers. Its flagship sports utility vehicle model XC90 has a maximum price cut of over 100,000 yuan, said the company on Thursday.

Other foreign automakers also responded right away. BMW, Mercedes-Benz, Audi and Porsche said respectively that they will evaluate the current suggested retail price in response to the government policy.

Toyota said "we will cut the price of imported vehicles and deliver more competitive products to Chinese customers".

The reductions may be more favorable to German automakers since one-third of cars imported to China in 2017 were built in Germany, making the country ahead of its rivals, Financial Times said.

BMW and Mercedes-Benz were the top two brands in sales volume of imported cars last year, said China Automobile Dealers Association.

According to statistics from China Association of Automobile Manufacturers in January, China produced more than 29 million vehicles and sold 28.88 million in 2017, and it imported over 1.2million vehicles, some 4.2 percent of total sales.

Wang Junwei contributed to this story.