Prices Of Luxury Cars Collapse In China

Bertel Schmitt
by Bertel Schmitt
prices of luxury cars collapse in china

The Chinese stock market is way down. Real estate speculation had reached its zenith a while ago, and prices are on a downward trajectory. So are prices of luxury cars. Now is the time to get great deals on a BMW, or a “Benz,” as they call a Mercedes in China. Dealers are killing each other with discounts to move the high-end metal. Says China Daily:

“Average prices of Daimler AG’s basic 2012 Mercedes-Benz C200 sedan at Chinese dealerships were 16 percent below the manufacturer’s recommended price last month, compared with 14 percent in October and 3.4 percent in July, when the model became available, according to data from China Auto Market. BMW dealers sold the 2012 320i sedan 11 percent below the suggested price, more than triple the initial discount for the 2011 model.”

Daimler, BMW and Volkswagen had record sales and record earnings this year, mostly driven by healthy exports to and sales in China. This could offset a flat European market, which shows signs of deterioration.

Last month, Audi posted a 69 percent jump in China deliveries to 29,861 units. BMW had a 9.8 percent increase in sales in the country, while Mercedes-Benz increased deliveries by 24 percent. Expansion however never goes on forever.

The benchmark Shanghai Composite Index has declined 22 percent this year and is trading at the lowest since March 2009. Home prices fell in 33 of 70 cities monitored by the government in October.

German makers are looking with worried faces to China. Big capacity expansions are underway, and if increased supply collides with collapsing demand, this year’s high-flyers could soon find themselves flat on their worried faces.

Join the conversation
7 of 39 comments
  • Acuraandy Acuraandy on Dec 19, 2011

    So, as I have mentioned before...what happens when China's economy collapses and they want to 'cash in' on US T-bills? And we end up not having the $? These end up at checkpoints on every main street and freeway exit in the United States with Chinese soldiers in broken English asking for our 'papers' (post-invasion). See 'Red Dawn'. MARK MY WORDS.

    • See 2 previous
    • Th009 Th009 on Dec 19, 2011

      @mike978 A weaker dollar would strengthen the US economy by encouraging exports and discouraging purchases of imported goods. And as Mike978 says, you cannot just "cash in" bonds -- they cannot be redeemed before the maturity date. (Of course if you find a buyer you can sell them to someone else.)

  • Wsn Wsn on Dec 19, 2011

    Put in another perspective, Beijing's real estate is roughly 1/5 that of Hongkong's price. I would say that Beijing is still undervalued.

  • Tekdemon Tekdemon on Dec 20, 2011

    Pretty sure people call them "Benz" all around the world and not just China...

  • Tekdemon Tekdemon on Dec 20, 2011

    That's not really that bad considering that there are like 200% tarriffs on these cars lol.