Luxury auto makers raise prices under anti-dumping investigation

One of the original factors driving the National Development and Reform Commission's anti-monopoly investigation of the Chinese automotive market was the excessive price gouging rampant among domestic 4S dealerships. However, despite the investigation, several luxury automobile brands, including Mercedes-Benz and Porsche, have continued raising prices of their automobile models. Industry analysts state that this phenomena is a sign that consumer rights still need more safeguarding.

The anti-monopoly investigations have been in full force since July of this year, with Cadillac, Audi and Mercedes-Benz all being implicated of engaging in monopolistic behavior. However, theLanzhou Morning Post found out that prospective buyers visiting a Beijing-based Mercedes-Benz 4S dealership would have to fork out 50,000 RMB ($8,117) more to get a CLA 260 now. The CLA 260's price has been steadily increasing in several dealerships ever since its launch.

Similar cases have been reported at 4S dealerships of other brands. An investigative reporter from the Lanzhou Morning Post visited a 4S dealership in Beijing to enquire about the price of the Macan crossover. When asked whether or not the Macan's price would increase, the salesperson in charge assured him it would not. However, he quickly added that additional coverage plans totaling 30,000 RMB ($4,871) would also need to be purchased. When the reporter stated that he was not interested in the plans, the salesperson responded that he would have to wait to acquire the vehicle.

When asked for clarification regarding the issue, industry analysts explained that both manufacturers and dealerships are still facing pressure to clear high inventories. However, dealerships still tell consumers that their stocks are limited, and that without raising prices they would be unable to purchase certain popular models. Commenting on the issue, China Automobile Dealers Association Deputy Secretary Jia Xinguang pointed out that some dealerships still intentionally misinform consumers about their remaining inventory in order to charge higher prices and gain larger profits.

A representative from a Shanghai VW 4S dealership explained their situation: "If others don't raise their prices we wouldn't dare to raise ours, but if they do then we have no choice."

An expert on industry monopolies pointed out that manufacturers may be behind these price raises. Alternatively, dealerships may also be coordinating on price fixing. Both of these practices constitute illegal monopolistic behaviors under current legislation. Qiu Baochang, a member of the legal team representing the China Consumers Association, stated that price raises of hard-to-find models and similar practices infringe upon consume rights and violate fair competition rules.