BMW announced a price cut on their spare parts by up to 20 percent on Friday to attenuate Chinese regulators after an antitrust probe on major car manufacturers and dealers was launched.
"The pricing and antimonopoly division of the National Development and Reform Commission (NDRC) has paid close attention to problems in China's auto industry and after-market service sector," BMW said, as quoted by the Wall Street Journal. The NDRC leads the economic development planning for China, which is considered the world's largest car market.
The German carmaker announced that the price cut covers almost 2,000 spare car parts including bodies, electric generators, batteries, brakes and compressors. The expected price cut is 20 percent of the original price, on average, which will take effect today.
BMW is the latest carmaker to lower prices since the Chinese government launched its antirust campaign. Other companies who were forced to drop their prices on spare parts included Jaguar Land Rover, Mercedes-Benz, and Daimler. Daimler announced a 15 percent average price cut last week on 1,000 spare parts. Audi also declared price cuts as high as 38 percent, while Jaguar Land Rover is preparing to reduce prices for at least three models.
The price cuts imposed on luxury car manufacturers were seen as the government's way to support their local car manufacturers. The market share for Chinese car manufacturers decreased to 37 percent in the first seven months of 2014. For the same period in 2013, market share was recorded to be at 40 percent.
Carmakers proven guilty of antimonopoly violations will be punished by the Chinese government. For instance, Audi and Chrysler will be fined up to 10 percent of their annual sales revenue once the probe found that they were involved in these practices. NDRC's ongoing investigation initially revealed that both companies had "conducted anti-competitive behaviors."
