BMW TO RAISE PRICES OF U.S.-MADE SUVS IN CHINA

But German carmaker absorbing much of higher costs arising from additional tariffs on US imports

GERMAN carmaker BMW said it will raise the prices of two United States-made crossover sport utility vehicles (SUVs) in China to cope with the additional cost of tariffs on US car imports into the world’s biggest car market.

In a move due to take effect today, BMW said in a statement over the weekend it would increase maker-suggested retail prices of the popular, relatively high-margin X5 and X6 SUV models by four to seven per cent.

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 US$34 billion (RM138.04 billion) of US imports, from soyabeans and cars to lobsters, as part of a widening trade row.

China, which this year cut tariffs on all automobiles imported into China, slapped an additional 25 per cent levy on US-made cars as of July 6. As a result, China now levies a 40 per cent 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,” said a BMW spokesman in an email.

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 carmaker 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 echoes 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 momentum.

China-based car dealers said German rival Mercedes Benz, operated by Daimler AG, moderately raised the price in China in the middle of this month of its GLE, a sporty midsize SUV produced in the state of Alabama.