German car-maker, Daimler, announced on Monday that it is cutting the prices of the Mercedes-Benz spare parts sold in China by 15 percent.
Beijing Mercedes-Benz Automotive Sales Co., the sales branch of Mercedes in China, explained that the price drop was due to the antitrust campaign launched by the Chinese government's National Development and Reform Commission.
According to the Wall Street Journal, the new prices will take effect officially on Sept. 1, and will cover up to 1,000 parts at an average of 15 percent. Some items, such as windscreens, will be discounted by as high as 29 percent.
Executive Vice President of after-sales for Mercedes in China, Marc-Oliver Nandy, stated that the price reductions in parts will lower the total usage cost of owning a Mercedes-Benz and will, therefore, improve its competency in the market.
The antitrust law in China was enacted in 2008 and targeted foreign products, including Mead Johnson Nutrition Co. and Danone SA. Audi also announced price reductions for spare parts in their Chinese stores by as much as 38 percent. The Jaguar Land Rover PLC also announced that it is preparing a price drop for at least three models, Reuters reported.
The Chinese state that the media had accused foreign car makers of earning too many profits by dominating the market and overcharging for auto parts. Similarly, demand for luxury cars in the country has been increasing, and experts predict that the demand in China could exceed the demand in the United States by 2016.
In the first half of 2014, Audi has sold 268,666 vehicles, 18 percent higher compared to the first half of 2013. BMW, on the other hand, sold at least 210,765 cars, 23.4 percent higher from last year's figures.
But some analysts were not happy with the current price reductions.
"It's not enough," said Yale Zhang, managing director of consultancy Automotive Foresight. "They need to cut their prices at least by half if they want to show their sincerity to the NDRC," he told the Wall Street Journal.
