Analysis: Car price comparison between China and the rest of the world

Gasgoo.com (Shanghai) - It is accepted as common knowledge that Chinese car prices are on the high side, but what is the truth like? Gasgoo.com (Chinese) has done a survey comparing the manufacturer's suggested retail prices for vehicles in China, the US, Japan and the UK.

Note: due to discrepancies between national taxes, and differences in configuration in different countries, this chart should only be used as a basic reference.

According to the results of vehicle prices in China, the US, Japan and the UK collected in the chart above, we can reach the following conclusions:

I. The prices of compact vehicles in China are not considered high in comparison with those in developed countries. In fact, there are a few models which are actually cheaper in China. The trends are related to low barrier to entry in the market and heated competition.

A large number of industry analysts has pointed out to the 87,000 yuan ($13,469) price tag on the GAC Toyota Yaris, which fits neatly in the subcompact class, as a key reason for its disappointing performance. Cars in the same segment, including the Chery QQ, Changan Ben Ben Mini, BYD F0 and Geely Panda, are priced around 30,000 yuan ($4,644) each.

However, when compared with other markets, the Yaris' price cannot be considered high at all. The Yaris is priced higher in the American and British markets, while its only about 4,000 yuan ($619.30) cheaper in Japan than in China. This demonstrates that Toyota still has some way to go in competing with models from local manufacturers..

The price of Changan Ford Mazda's Focus is also lower than in the US or UK, but still higher than its Japanese counterpart.

II. The prices of mid-level and luxury cars in the country is still much higher than in developed countries. We anticipate that this trend will continue for the near future.

For example, the price of Shanghai VW's new Passat is 218,800 yuan ($33,875) in China, higher than the 181,000 yuan ($28,023) charged in the US and the 196,900 yuan ($30,485) in the UK. Meanwhile, the Mercedes E-Class is about 150,000 yuan ($23,224) more expensive in China than in the US or the UK. There are three possible reasons for this:

1. Demand in the domestic market for this segment is strong, with no force to push prices down.

2. Despite the fact that there is a large number of manufacturers competing in the mid to upper level market, there are fewlocal players with a competitive advantage in production. With the ever increasing number of mid to upper level models brought over to China, such as the new VW Passat, Peugeot 508, the eighth generation Hyundai Sonata and Kia K5, we believe that this segment is only bound to become more competitive, which should help bring prices down slightly. The key point of competition for these manufacturers will lie in customer service and what features they offer.

3. The low rate of domestic auto parts used and limited domestic production among manufacturers in the segment is another reason for the very high prices. This is due to the low level of development in the Chinese auto part industry, as well as the lack of motivation from international enterprises.