The chinese government is conducting anti-monopoly investigations into luxury cars. Competition should be encouraged and the monopoly on car sales and maintenance should be eliminated by, inter alia, stopping the implementation of licensing by car general distributors and automobile brands。
In recent days, a number of foreign-owned cars have been subject to anti-monopoly investigations, raising concerns. In fact, the opportunity to combat administrative monopolies through the formation of open luxury car prices is also an opportunity。
What are the taxes and taxes on foreign cars in china
It is well known that there can be no poor administrative monopoly in a fully competitive market, with only high brand premiums。
High domestic prices for luxury cars are above taxes. High car prices are the sum of cifs, taxes and commercial profits. The media revealed that a bmw of 650i grancoupe sold in the united states at $911 million, approximately $562 million in rmb, and in the chinese market at $2. 05 million, 3. 5 times the price in the united states。
Price composition accounts for a large portion of taxes and fees. In bmw x5, for example, all import duties are duties + excise tax + vat and duties on car imports are 25 per cent (with the wto agreement abolished after 2015); different excise duties are levied, depending on the amount of charge, to reflect the principle of energy efficiency, 1 per cent of emissions below 1. 0 litres (with 1. 0 litres), up to more than 3. 0 litres to 25 per cent of 4. 0 litres (with 4. 0 litres), and 40 per cent of emissions above 4. 0 litres, with different levels of 3 per cent, 5 per cent, 9 per cent and 12 per cent; vat uniform at 17 per cent。
Based on the example of the x5 car, the cost of 4s in the united states (which the bmw web site can match) was $60,000 (high-configuration), with 4s in the united states — port — loading — and chinese ports (tientsin, ningbo or dalian) plus freight plus insurance at $3,000, at $63,000。
On this basis, bmw x5 duty amounts to $157. 5 million ($6. 36 million x 0. 25); bmw x5 import consumption tax ($63,000 + $157. 5 million) x 0. 12 (1-0. 12) = $10. 7 million; bmw x5 import value added tax ($63,000 + $157. 5 million + $10. 7 million) x 0. 17 = $15. 2 million; total import tax of 1. 575 + 1. 07 + 1. 52 = 4. 165; car exit price: 6. 3 + 4. 165 = $104. 65 million, at which point china's customs rate is 65 per cent above that of the united states and is not disproportionate。
Other are grey cost space and profit space. Industry calculates that imports need to be paid in full, that 4s stores in the country need human and financial costs, and that the grey costs of various permits are high, that is to say, there are unknown large black holes. During the whiff-out period, there was a huge premium on luxury branded cars, competition for current luxury cars was taking place between several foreign brands, and domestic brand cars had little to say about it, so that china’s general agent was profitable. It is impossible, however, for the bmw 650i grancoupe agents to profit 1. 44 million。
Automobile sales monopoly is broken, maintenance monopoly is still in place
It is difficult to have a long-term monopoly in the automobile industry, and large premiums tend to attract large numbers of competitors, returning the industry to average profits. Media reports indicate that the chinese automobile market is highly competitive, that it is difficult for car companies to control prices, that there are frequent failures of 4s stores and that horizontal monopolies no longer exist. According to the senior expert in the automobile industry, most of the manufacturers now have very low profit margins as market competition increases。
All that needed to be done to break horizontal monopolies was to encourage competition and encourage international firms to compete in china if domestic automobile firms were not strong. Prices returned naturally。
Surprisingly, there is also a vertical quasi-administrative monopoly in the automobile maintenance industry. In april of this year, the chinese insurance industry association and others jointly issued the first “zero-sum ratio” factor for the “full-car parts” of 18 common types of cars in the country, with the exception of the mercedes-c class w204, up to 1273%, and the bmw and ody, among others, which are home-grown “zero-sum” models, all of which are high on the top of the list, with the post-solar index even exceeding the brand of luxury cars. The price of spare parts for a luxury far exceeds the price for the vehicle as a whole, or even more than a dozen times。
In contrast, vertical monopolies in the automobile sales and maintenance industries are encouraged by the regulations of the relevant government departments. In 2005, the ministry of commerce, the drc and the general directorate of commerce and industry issued the automotive brand marketing administration scheme, which provides that automobile suppliers should develop a network plan for the sale of automobile brands and services, and that domestic automobiles are to be distributed with the authorization of the whole garage and be filed with the ministry of commerce and the business sector. While regulating the market, the scheme strengthens the ownership of the whole plant in the sale of the entire vehicle and the supply of spare parts, and the distributor is in a passive position of vulnerability. Since sales and maintenance are the exclusive preserve of me, the whole car company is enjoying a lot of profit, suffering from high maintenance prices。
This regulation, which was intended to regulate the market, in effect condones monopolies and has been enforced so far only with the benefit of the approving authority and the car manufacturer. Fortunately, policy adjustments were initiated, and the directorate-general of commerce and industry issued a bulletin suspending the filing of car general distributors and car branding authorizations from 1 october 2014 and the receipt of filings from car suppliers from 20 august. The monopoly on car sales was abolished and the monopoly on car maintenance remained. In this regard, the most ill-intentioned are the luxury car manufacturers, who are too aware of the monopoly of windfall profits in the area of sales maintenance。
Finally, it should be stressed that the idea that a rich and rich family buys only expensive, unbuyable cars contributes to the growth of high-priced cars and that premature consumption is responsible。
Responsible editor: zhang dei
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