Reduction of import tariffs and opening of auto market

In the hot summer, as the tariffs on imported cars are about to be lowered on July 1, the imported 4S shops have sold at a reduced price, bringing some coolness to the buyers.

After the downgrade of the tariffs, the imported car market officially ushered in a wave of price cuts. When the import tariffs fall, the new policy is like a cobblestone thrown at the lake. The ripples are spreading from near to far.

Luxury brands face the New Deal directly. The joint venture brands and independent brands with high localization in China have little direct relationship with the New Deal, but the “conduction effect” in the market will eventually affect other participants in the market. Imported cars after price cuts will be in direct competition with the mid- to high-end models of joint ventures or independent brands that are similar in their positioning.

In the long run, domestic automobile enterprises must gradually increase their international competitiveness in the event of a drop in tariff protection.

How to Calculate Car Import Tariff

An imported car contains tariffs of 25%, VAT of 17% and consumption tax of 1%-40%. How much does it cost to buy an imported car? Taking a BMW X6 with 4.4T displacement imported from Germany as an example, assuming that the duty-paying price of this vehicle is 500,000 yuan, its import price is as high as 1.218 million yuan.

The specific tax formula is calculated as follows: tariff = tariff rate × tariff rate; consumption tax = {(duty price + tariff) / (1-consumption tax rate)} × consumption tax rate; value-added tax = (duty price + tariff + consumption tax) × VAT tax rate. According to the tax calculation formula, this 4.4T BMW X6 is required to pay a tariff of 125,000 yuan, a displacement tax of 416,000 yuan, and a value-added tax of 177,000 yuan. In fact, the X6 model has doubled its sales price by paying various taxes and fees.

Indeed, under the current import tariffs and displacement consumption tax policy, the price of imported cars will indeed be higher. This is not unrelated to high tariffs and high-displacement consumption taxes.

Car companies grab prices, 4S shop grab customers

In some imported car 4S stores in Beijing, the customers seem to be a little more than usual. The sales staff is very enthusiastic about the customers who just entered the door: "Import tariffs are falling, the cars in our store are much cheaper than before, if you book a car now There are more deals."

In a 4S shop of Jaguar Land Rover, the actual terminal price of each model did not drop much. The huge 4S shop parking lot full of new models of various models of goods vehicles, inventory is obviously a bit backlog.

The sales staff told this reporter: “Before the official price reduction, many models of Jaguar Land Rover have already had substantial discounts. It can be said that dealers are losing money, and the loss of one car is very large, and the pressure on one store is high. All of these are in excess of 100 million yuan. In fact, this time, the retail price at the dealer level has not been adjusted downwards. The original concession has been very strong. This time, taking advantage of this opportunity to stabilize the price."

The reporter then inquired on a website of a Jaguar Land Rover 4S store that all the current models had no concessions, but only quoted price after the tariff reduction.

It is understood that after the release of the tariff reduction message, although many imported car brands have been downgraded, they are actually sticking money because the implementation date of the tariff reduction is July 1, while the current sales model is 25% before. The import of tariffs.

An unnamed dealer stated that "the current dealers' so-called price cuts are mostly gimmicks made through tariff reductions. They are essentially nothing more than continuation of promotions before the cut." In fact, most dealers also There is no way, if the news comes out, if the price is not adjusted, the consumer will definitely hold the currency for purchase. When the new car becomes the inventory car, it is better to stop the price and stop the loss. It also has a good reputation for responding to the policy.

In a BMW 4S shop, the sales staff said: "For this X5 with 2.0T models, for example, this car guide price reduced by nearly 60,000 yuan, less than 610,000 yuan after the discount, no price adjustment before selling More than 630 thousand yuan, more than 20,000 yuan less than the actual. "In addition to the X5, the actual price of high-end imported BMW X6, 7 series and other high-end cars, there are at least 20,000 yuan in the actual reduction, the higher end of the model price cuts Bigger.

Although the time for the official implementation of the import tariff reduction on automobiles was from July 1, 2018, the auto makers apparently could not wait. They announced that they would cut the prices of the relevant models from May 25 this year. Tesla even issued a policy. On the same day, the latest tariff confirmed price was synchronized to the domestic sales outlets.

"Model S 75D now sells for 710,000 yuan, which is equivalent to a reduction of 48,000 yuan after the tariff reduction. Although the tariff reduction policy is implemented starting from July 1, consumers can now enjoy the tariff reduction after buying a car." The price." Tesla sales staff introduction.

On June 24th, our reporter visited some 4S shops in Fengtai District and found that there were still many people who came to the store for consultation.

During the visit, our reporter found that many people who have visited the 4S shop in the past two days have received calls from sales personnel, informing them to come to the store to see the car, and told the car that there are not many cars.

"Now almost every 4S shop is rushing customers. We have arranged several sales people to call potential customers in the past few days, tell them the news of tariff reduction, and inform them to come to the store as soon as possible, even if it is not a weekend, in normal times. The customers who came to see the car before the working day were also more than usual.” A salesperson at an Audi 4S store in Fengtai District said.

Not only 4S stores, the high-end second-hand imported car market is also crazy to grab customers.

"The new policy on import tariffs on automobiles has just announced that high-end second-hand imported vehicles have even appeared to lose money." A person in charge of Beijing Beichen Yayuncun Automotive Trading Market admitted that dealers are losing money to sell vehicles on the one hand to reduce inventory. On the one hand, there is still a fear of greater losses, because it is uncertain whether the tax rate will be lowered again in the future.

From this we can see that with the reduction of import tariffs on automobiles, no one wants to lose this "big sale" opportunity. In this regard, the industry believes that the tariff reduction of imported cars, so that luxury cars represented by imported cars have greater price concessions, although price promotion is a double-edged sword, but it is the most direct marketing for manufacturers to compete in the market and increase sales. means.

Help domestic automakers to increase their competitiveness

At the same time as the tariffs on imported vehicles are lowered, the imported auto parts are also reduced to 6%. Some investors believe that reducing tariffs is not conducive to the development of independent brands, but is this true?

The person in charge of the Customs Tariff Commission Office of the State Council stated that taking the initiative to reduce auto import tariffs is the need for China to further expand its reform and opening up, and it is also a need for the auto industry to push forward with structural reforms on the supply side and transformation and upgrading.

The industry generally believes that for the automotive industry in China, the drop in import tariffs will depress the profitability of the Chinese auto industry in the short term, and will help the Chinese auto industry become bigger and stronger in the medium to long term.

In an interview with this reporter, Cao Xiyong, the marketing director of Guangdong Hongtu Technology Co., Ltd., said that the reduction of auto parts tariffs will prompt the company to increase its market competitiveness, gradually eliminate simple and small parts, and focus on developing complex and large-scale components.

“We will increase the development of the entire overseas market, and then we will maintain the share of our existing customer orders. Then we do a good job of the entire cost management, and we will do some precision production improvements to reduce the cost.” Cao Xiyong said.

Cao Xiyong said that the introduction of the tax reduction policy will not have too much impact on the existing projects of domestic auto parts manufacturers, but the future market competition will certainly be more intense.

Regarding the policy of tariff reduction on imported cars, some investors believe that it has a certain impact on domestic cars, but people in the industry have stated that this is more of an effect of psychological and emotional, and the imported car market will not become the main body of our large automobile country. Because the needs of local consumers are the first, such as the development of localization, delivery speed, iterative design are all important factors that the market is very concerned about.

Since the announcement of the tax reduction policy, the attitudes of the distributors of imported cars, domestic car brands, and consumers have been different. How does the secondary market respond to this?

The industry believes that after the introduction of the tax reduction policy, the price adjustments that may be made by imported vehicles will have relatively limited impact on the price system of domestic and joint-venture vehicles. This is an acceptable range, which has eased the pessimistic mood of the market for substantial tax cuts. The response is mild, but in the long run, tax cuts may still affect plate performance.

Zhao Ping, director of the International Trade Research Department of the China Council for the Promotion of International Trade, said that the domestic (including joint venture brands) and imported car market positions are quite different. Even for the same series of high-end cars of the same brand, the steps for listing imported cars and domestic cars are different. Competition is not So obvious. In addition, the proportion of imported cars is relatively small, and the impact of imported cars on domestic cars is limited.

Luo Lei, deputy secretary-general of the China Automobile Dealers Association, believes that the used car market in China will maintain a relatively high growth this year. After the tariff reduction on imported cars, consumers have a general expectation of price cuts, and they are often held in a coin for purchase, and the mid- to high-end used car market will enter a relatively weak state.

Luo Lei said that the proportion of used car market in China is mainly concentrated on used cars under 50,000 yuan, accounting for more than half of the entire market. Tariff reduction mainly affects mid- to high-end used car market, but due to the growth of the main varieties of the market, Low-end used cars are the mainstay. Although consumption has been upgraded in recent years and the varieties have moved up, the impact on the entire used car market is not obvious.