The drastic drop in imported vehicle prices this year and various policies are still uncertain, and imported car dealers are facing a dilemma. Many dealers stopped orders as early as three or four months ago to avoid policy risks. Market participants believe that due to the decreasing number of inventories held by imported car dealers, imported car prices will rebound after New Year's Day next year. Import car dealers believe that, unlike two years ago, import quota permits are no longer the main reason affecting imported car prices. The current supply and demand relationship affects the level of car prices. This year's imported car dealers have suffered serious losses, and the number of closed dealers is also small, the total number of dealers has decreased, the number of imported cars has also decreased, and prices have naturally become firm. At the same time, the drop in tariffs on imported cars next year is not significant. Since 8% of the consumption tax and 17% of value-added tax will not change, and considering multiple vehicle price components such as port miscellaneous fees and domestic freight, the combined tax rate of imported cars of more than 3 liters in next year will only drop by 5 percentage points compared with that of the previous year. Therefore, the tariff reduction in 2005 has a very limited impact on the price of imported vehicles. Even after the tariff on imported cars was reduced to 25% on July 1, 2006, the price reduction of an imported 2.5L sedan due to tariffs in the next two years was only around 6%. According to industry experts, given that the price of imported cars is currently approaching the cost price, some of them are even lower than the cost price, and the possibility of continued price cuts is very small.
The dealer's dilemma has fallen!
The drastic drop in imported vehicle prices this year and various policies are still uncertain, and imported car dealers are facing a dilemma. Many dealers stopped orders as early as three or four months ago to avoid policy risks. Market participants believe that due to the decreasing number of inventories held by imported car dealers, imported car prices will rebound after New Year's Day next year. Import car dealers believe that, unlike two years ago, import quota permits are no longer the main reason affecting imported car prices. The current supply and demand relationship affects the level of car prices. This year's imported car dealers have suffered serious losses, and the number of closed dealers is also small, the total number of dealers has decreased, the number of imported cars has also decreased, and prices have naturally become firm. At the same time, the drop in tariffs on imported cars next year is not significant. Since 8% of the consumption tax and 17% of value-added tax will not change, and considering multiple vehicle price components such as port miscellaneous fees and domestic freight, the combined tax rate of imported cars of more than 3 liters in next year will only drop by 5 percentage points compared with that of the previous year. Therefore, the tariff reduction in 2005 has a very limited impact on the price of imported vehicles. Even after the tariff on imported cars was reduced to 25% on July 1, 2006, the price reduction of an imported 2.5L sedan due to tariffs in the next two years was only around 6%. According to industry experts, given that the price of imported cars is currently approaching the cost price, some of them are even lower than the cost price, and the possibility of continued price cuts is very small.