Bloomberg News

Daimler to Cut Mercedes-Benz Parts Prices in China

August 03, 2014

Mercedes-Benz at the Beijing Auto Show

The NDRC, China’s top economic planning body, is probing practices at Mercedes-Benz, Audi, Bayerische Motoren Werke AG and Japanese carmakers to see whether prices of spare parts are being artificially boosted, Bloomberg News reported on July 18, citing people familiar with the matter. Photographer: Tomohiro Ohsumi/Bloomberg

Daimler AG (DDAIF:US) said it will cut spare-part prices for its Mercedes-Benz cars in China by an average 15 percent from next month amid a government investigation into whether automakers manipulated prices.

The reductions will include more than 10,000 products covering all Mercedes-Benz models, with a 29 percent decrease on windshields, the company said in an e-mailed statement yesterday. The move will improve the carmaker’s competitiveness in after-sales services, it said.

Daimler has joined Volkswagen AG’s Audi brand in lowering prices on spare parts and the cost of after-sales services as China steps up scrutiny of the business practices of foreign companies. Chinese regulators last month opened an anti-monopoly investigation into Microsoft Corp. and state media accused Apple Inc. of using its iPhone to steal state secrets.

From Sept. 1, Mercedes-Benz will “take the initiative to adjust the prices of some spare parts” in response to the National Development and Reform Commission’s investigation, Daimler said in the statement. “The latest move by Mercedes-Benz in the area of after-sales will provide a more attractive after-sales service experience for Chinese consumers.”

Mercedes-Benz has put in place a new after-sales service program where customers can save as much as 20 percent on the cost of getting their cars serviced. The NDRC, China’s top economic planning body, is probing practices at Mercedes-Benz, Audi, Bayerische Motoren Werke AG and Japanese carmakers to see whether prices of spare parts are being artificially boosted, Bloomberg News reported on July 18, citing people familiar with the matter.

Some automakers cut prices after “they were contacted” by Chinese officials, China Daily reported on July 29, citing Xu Kunlin, director of the NDRC’s bureau of price supervision and anti-monopoly. Xu didn’t provide names of the suspected monopolies, the report said.

Audi’s Chinese joint venture said on its website on July 26 that Audi would lower replacement costs of its parts by as much as 38 percent starting Aug. 1.

To contact the reporters on this story: Zhang Dingmin in Beijing at dzhang14@bloomberg.net; Tian Ying in Beijing at ytian@bloomberg.net

To contact the editors responsible for this story: Andreea Papuc at apapuc1@bloomberg.net Andrew Monahan, Nerys Avery


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