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With the anticipation of the upcoming National Holiday Golden Week, most car manufacturers in China including market leaders Volkswagen, General Motors and Toyota, have decided to cut down prices to boost its sales. What is the market response to price cuts? Will sales comply with manufacturers' wishes?
After this June's collective car price cuts, auto manufacturers have again lowered prices one after another, triggering a new round of price wars between domestic brands before the National Holiday, which is regarded as a golden business opportunity by many manufacturers. China Radio International reported Monday.
Actually more than 50 car models have lowered prices by more than ten percent, including Hyundai's Elantra and Sonata. Even the Toyota Corolla, which has been sold for less than half a year so far, has also lowered its price by over 620 US Dollars.
"The aim of this round of price cuts is quite obvious. We want to boost consumption during the national holiday." said Li Manli, general manager of Bei Fang Auto Trade Market.
For sure, it is good news for consumers who have cherished the intention of purchasing private cars for a long time but still hold off on the expectation of further price drops.
Consumers' opinions are quoted as following:
"Recently car prices have witnessed a large scale decrease. I came here to take a look and think about buying one."
"I think the prices offered now are quite reasonable."
"I want to wait for further price cuts."
Car dealers of Chinese First Automobile Works—Volkswagen joint venture says they have already benefited from the price cuts.
"For sure, the price cuts have promoted a large portion of our sales." they are quoted as saying.
Meanwhile, experts predict that in the future, low prices won't be the winning point in fierce auto market competition, especially for domestic economic sedans. And services provided by manufacturers will become more and more important in winning favour in the market.
Actually, the BYD Auto Company has promised its customers that by the beginning of next year, any car-buyer can receive compensation if the cars that they have bought witness price cuts, (even after they buy them).
(CRI.com September 13, 2004)
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