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Aug. 8 Newsletter


Management Reshuffle

Former Volvo executive to serve as chairman of Geely's new JV 

  • On Aug. 4, Zhejiang Geely Holding Group and Volvo Cars signed an agreement at Geely's R&D center in Hangzhou Bay to set up a new 50/50 joint venture (JV) for technology sharing. Lars Danielson, former senior vice president for Volvo Car China Operations and CEO for Volvo's Asia-Pacific operations, will serve as chairman of the new JV. 

  • Under the leadership of Danielson, Volvo has once expanded its industrial system in China by setting up car plants in Chengdu and Daqing and building an engine plant in Zhangjiakou.  (Internet Info Agency, Aug. 8) 

Industry Trends

Vehicle purchase tax law opens to public opinions – tax rate remains as 10%

  • The Ministry of Finance recently published the draft law on vehicle purchase taxes, which is open to public opinions.

  • Compared to the provisional regulation on vehicle purchase taxes, the draft law changes the tax objects to automobiles, motorcycles, trailers and streetcars. The draft law also specifies four scenarios for tax exemption and reduction.

  • Moreover, it sets the vehicle purchase tax rate at 10%, same as the rate stated in the provisional regulation on vehicle purchase taxes. (Economic Information Daily, Aug. 8)

Second-tier luxury brands cut product prices to catch up with ABB in sales

  • Data from the China Passenger Car Association shows that cumulative retail sales in China's passenger vehicle market dropped 0.2% year-on-year in the first half of this year. The luxury vehicle market reported year-on-year sales growth of nearly 20% to around 1.21 million units between Jan. and June. Audi, BMW, and Mercedes-Benz held a combined market share of 70% during the period.

  • In recent years, the market share held by first-tier luxury brands has been on the decline. Despite this, it still needs time for second-tier luxury brands to catch up with first-tier brands.

  • Second-tier luxury brands are providing hefty discounts to help stimulate sales. Cui Dongshu, secretary-general of the China Passenger Car Association, believes that a price reduction can help second-tier luxury brands boost sales growth to some extent, but is likely to damage these brands' value in the long term. (Time Weekly, Aug. 8)

Targeting new energy and autonomous driving: parts suppliers accelerate localization in China

  • Given China's promising new energy market, multinational parts suppliers are stepping up their localized strategies and expanding their deployment in the new energy field.

  • Bosch recently said that the company would continue its investment and introduce its latest technologies into China, the world's largest vehicle market, to meet growing demand for electrification and self-driving solutions.

  • A number of multinational parts companies rolled out their plans and localized strategies during Auto Shanghai 2017, with a focus placed on the sectors of new energy and autonomous driving.

  • With the approach of the vehicle electrification era, parts companies are accelerating technological innovation. The auto industry is being reshaped by the trends of low carbon, electrification, informatization, and car sharing, according to Fu Yuwu, president of Society of Automotive Engineers of China (SAE-China). (21st Century Business Herald, Aug. 8)

Latest Car Models

Mercedes-AMG 43 series to hit market on Aug. 24

  • The Mercedes-AMG 43 series will hit the market on Aug. 24, offering the new Mercedes-AMG C 43 4MATIC special edition, new Mercedes-AMG E 43 4MATIC special edition, new Mercedes-AMG GLC 43 4MATIC, new Mercedes-AMG GLC 43 4MATIC special edition, new Mercedes-AMG GLC 43 4MATIC Coupe SUV, and new Mercedes-AMG GLC 43 4MATIC Coupe SUV special edition.

  • Mercedes-Benz has been taking pre-orders for the four special editions starting June 1 with a pre-sale price range of RMB 690,000 to RMB 1 million.

  • Customers who place pre-orders before Aug. 31 and pick up their vehicles before Dec. 31 will have the opportunity to win exclusive offers. (Chexun, Aug. 8)

 

All-new BMW 5 Series with standard wheelbase length to be launched on Aug. 25

  • The all-new BMW 5 Series with a standard wheelbase length will be officially launched at this year's Chengdu Motor Show, which will kick off on Aug. 25. 

  • It has been reported that the new model will basically retain the exterior design of the current long-wheelbase 5 Series.

  • The new model is expected to be powered by a 2.0T or a 3.0T gasoline engine paired with an eight-speed automatic transmission. (Autohome, Aug. 7)