China has put an end to EV subsidies. It also ended the tax cuts, which were offered earlier to vehicle makers to improve sales. The demand for vehicles in the world’s largest market is weak. The lifting of the controls imposed during the pandemic failed to revive the demand for cars in China.
According to information gathered from the news website, automakers such as Volkswagen AG, BMW Group, and Ford are offering huge discounts on the listed prices of vehicles to lure buyers and enhance sales in the already slumping market. They are also offering promotional benefits to car buyers to revive the demand. The manufacturers of Citroen and General Motors are offering discounts on their gas-powered vehicles.
Retail car sales decline in early 2023
The retail sales of vehicles in China have declined by almost a fifth YoY in January and February 2023. Several consumers are staying on the sidelines and avoiding the purchase of expensive vehicles because of the bleak economic outlook. A drop in sales of gas-powered vehicles and stalled growth for several years in a row in China are creating a difficult situation for foreign automakers. They are also facing competition for electric vehicles from domestic automakers.
Ford reduces $6,000 from the list price of the Mustang Mach-E
The US automaker has slashed the price of its Mustang Mach-E by $6,000. The price reduction applies to the Mustang Mach-E until April 2023. It offers a battery-operated standard version of the SUV at $31,000. According to data gathered from the industry, only 84 cars were sold in February in China, a drop from 1,500 cars in December 2022. An increase in sales in December 2022 was due to offering a discount of 9% on the original price. A spokesman for Ford said it was a stock clearance sale.
The discount offers on cars vary at the automakers and dealers in China. It varies from one percent to half the usual price. The leaders in China lifted pandemic controls in December 2022 to improve consumption and revive the economy. However, the Chinese government has put an end to long-term electric vehicle subsidies and tax cuts that helped boost demand for cars in the last year.
Around 500,000 vehicles, including old models and gas-powered vehicles, are at dealers in China. Some of these models do not comply with emission standards, which came into effect in July 2022, according to an analyst, Kelvin Lau of Daiwa Capital Markets.
Volkswagen JV slashes vehicle prices for EVs and gas-powered vehicles
Volkswagen, which has a joint venture with the Shanghai government, announced on Thursday that it has reduced the prices of twenty electric and gas-powered vehicles until April 2023. The discounts vary from $2,200 to $7,300, depending on the type and model. According to the most recent news gathered from the websites, the JV has already offered a discount of $6,000 on the original price of the electric ID series. A spokesperson for Volkswagen said its promotional offers are temporary to lure reluctant car buyers. It also helps to overcome prices slashed by its peers and new emission standards.
The C6 gas-powered vehicle of Citroën Automobile Co. is available for $18,000, a discount of 40% on the original price. The company sold 100 vehicles in February 2023. This model is not moving faster in the market.