The luxury car maker from Germany issued the statement on Sunday after a unit of China's economic-planning body, the National Development and Reform Commission staged an antitrust campaign that addresses the auto industry. As a response, the Beijing Mercedes-Benz Automotive Sales Co will cut down the prices of some of its spare parts.
The move, which was instigated by the anti-monopoly regulators in China, is aimed at preventing global automakers from committing price gouging when they repair and replace their foreign branded car components. China is strengthening its efforts to enable these companies to comply with the 2008 enacted anti-monopoly law.
Part of the country's efforts has already involved several industries which include technology firms, jewelers, milk-powder producers, and drug makers. In fact, a number of multinational firms have already been hugely fined after being investigated. These would include Danone SA and Mead Johnson Nutrition Co.
Daimler AG plans to cut prices of spare parts for its China-based Mercedes-Benz cars by an average of 15% which they plan to begin on Sept. 1. The price reductions would cover more than 10,000 products of all models of Mercedes-Benz. The company has even confirmed through email of a 29% decrease on the price of windshields. It added that the price reduction scheme will definitely increase the carmaker's competitive status when performing after-sales services.
Prior to this, Mercedes-Benz has launched a programme in China last month which focused on cutting service charges and the prices of spare parts which had been part of the service by a 20% average.
Executive vice president of after-sales Marc-Oliver Nandy for Mercedes in China says that the reduction "would further lower the usage cost for our customers and would improve Mercedes-Benz's competitiveness in the after-sales market."
Rival car makers have also responded to the campaign with their own price cutting scheme for spare parts. These would include Audi AG which announced a 38% price cuts for spare parts and Jaguar Land Rover PLC which promised to reduce the prices of their three models.
The response of the luxury car makers to the investigation by the National Development and Reform Commission's pricing and antimonopoly division clearly shows how they have become increasingly dependent on China. These companies understand very well how the Chinese market can easily create a huge impact in the demand for sport-utility vehicles and upmarket sedans.
Yale Zhang, the managing director of consultancy Automotive Foresight says that Mercedes-Benz in China has "to cut its prices at least by half if they want to show their sincerity to the NDRC."
