Rolls-Royce says higher China price is due to higher taxes

Article by Anita Panait, on October 24, 2013

Rolls-Royce Motor Cars said their offerings in China have higher sticker prices than in other countries because of the higher taxes in the Asian giant, Rolls-Royce chief executive Torsten Mueller-Oetvoes told Bloomberg in an interview. He said that the carmaker still earns more or less the same profit on a car despite the price difference.

"It is not a big difference between a car sold in China than a car sold in the US or Middle East, profit-wise," he said. Foreign luxury carmakers came under fire after Chinese media reported that some imported cars sold in China are around two to three times pricier than in other markets.

State-run broadcaster China Central Television ran a report on Oct. 20 that criticized foreign brands like Starbucks and Jaguar Land Rover for discriminatory pricing in the country. Rolls-Royce, however, wasn't named in the report.  "One should not be mistaken by the absolute price," Mueller-Oetvoes remarked to Bloomberg.

A Rolls-Royce Ghost sedan costs around CHY4.19 million ($688,000) in China, according to autohome.com. A Rolls-Royce Ghost sedan has a starting price of $256,650 in the U.S., based on quotes from motortrend.com. According to Mueller-Oetvoes, the tax levels in China are "extremely high," exceeding those in other markets like the US, Europe, the Middle East and Russia.

He added that the final retail price of a car in China also carry other costs and fees.  Mueller-Oetvoes remarked that China may regain its spot as Rolls-Royce's biggest market this year, overtaking the US.

According to Mueller-Oetvoes, the carmaker currently has 16 dealers in China and will add four more in the cities of Changsha, Taiyuan, Kunming and Nanning by the end of 2013.

Topics: rolls-royce, china, price

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