BMW to raise prices of US-made SUVs in China

German carmaker BMW said it will raise the prices of two USmade crossover sport utility vehicles (SUV) in China to cope with the additional cost of tariffs on US car imports into the world’s biggest auto market.

In a move due to take effect on Monday, BMW said in a statement to Reuters over the weekend that it will increase suggested retail prices of the popular, relatively high-margin X5 and X6 SUV models by 4 percent to 7 percent.

The rates of increase suggest that BMW is willing to absorb much of the higher costs stemming from bringing the SUVs to China from its factory in South Carolina, underscoring the fierce competition among luxury car brands in China.

BMW’s move comes after China imposed new tariffs earlier this month on about $34 billion of US imports, from soybeans and cars to lobsters, as part of a widening trade row.

China, which this year cut tariffs on all imported automobiles, slapped an additional 25 percent levy on US-made cars as of July 6. As a result, China now levies a 40 percent import duty on all cars imported from the US.

“BMW stands for free (trade) but can’t stand still without taking actions to respond to the market changes,” a BMW spokeswoman said in an email message to Reuters.

BMW imports X4, X5 and X6 crossover SUV models from the US for sale in China, where demand for SUVs has been booming. Last year, the German automaker shipped more than 100,000 vehicles from the US to China.

The company made no reference to pricing of its X4 model.

BMW’s decision to absorb much of the impact of the higher tariffs was in line with an earlier move by US carmaker Ford Motor

Co, which said it would not increase its prices for now in an effort to sustain its business mocar mentum.

China-based car dealers told Reuters that German rival Merrated cedes Benz, operated by Daimler AG, moderately raised the price in mid-July of its GLE, a sporty mid-size SUV produced in the state of Alabama, in China.

referred A Daimler spokeswoman Reuters to comments made by the company last week.

Daimler Chief Executive Dietlast er Zetsche said last Thursday the car maker was looking at ways to mitigate the impact of the trade conflict. This would include a reto view of whether shift some US production to China.