VAT tax rate down Mercedes-Benz Jaguar Land Rover, Lincoln, and other car companies to reduce prices

From May 1, the value-added tax rate in the manufacturing industry and other industries fell from 17% to 16%. Mercedes-Benz, Jaguar Land Rover, Lincoln and many other luxury car makers ran counter-product prices.

Beijing Benz launched the first shot of price cuts.

On May 1, Beijing Benz officially released the news that the company will, in accordance with relevant policies on the impact of the price, reduce the manufacturer's suggested retail price of the vehicle on sale from that day. Terminal retail prices are set by authorized dealers. Affected by this policy, Mercedes-Benz’s models range from 1,000 yuan to 32,000 yuan.

Jaguar Land Rover also announced that it will adjust the official guided retail price of the models on sale from now on, with a maximum reduction of 20,000 yuan.

On the same day, Lincoln Motor Co., Ltd. adjusted the price of its five models from now on. The adjusted price was lower than before, among which the navigator model had the largest drop, reaching 10,000 yuan. At least, some models of the MKZ and MKC models also have The drop of 0.26 million yuan.

On March 28, 2018, the State Council Executive Meeting decided to deepen the measures for the reform of the value-added tax to further reduce the tax burden on the market. From May 1, 2018, the value-added tax rate for manufacturing and other industries was reduced from 17% to 16%.

According to data from the National Passenger Vehicle Market Information Association, the profit of the auto industry in January-December of 2017 reached 645.8 billion yuan, which is the highest in the manufacturing industry in terms of total amount, but the growth rate is relatively low, only 5.8%. According to data from the National Bureau of Statistics, in 2017, 29.94 million vehicles were produced, a year-on-year increase of 3.2%, and the growth rate of cars was -1%. The automotive industry's profit margin in 2017 was 8%, a decrease of 0.4% from 2016.

Li Yanwei, a member of the Expert Committee of the China Automobile Dealers Association, said that many of the country's tax and fee adjustment policies have directly benefited end consumers. Combined with the downward trend in tariffs on imported cars, it may lead to an overall decline in the prices of domestic luxury cars. The dealer’s customer base has increased and the number of customers has increased. In the long-term, it will benefit car dealers.