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Auto Tariff Causes Price Hikes
The price increase of imported Japanese automobiles in the domestic market has escalated, following the Chinese government's announcement on Wednesday that it has imposed special duties on Japanese cars.
Almost all car dealers have increased prices for imported Japanese cars by 20,000 yuan (US$2,410) on average at the Asian Games Village Automobile Exchange Market, the largest of its kind in China, according to Qie Xiaogang, a manager with the market.
The price rise is buoyed by China's announcement that 60 Japanese imported items, including 52 types of automobiles, are subject to a special tariff of 100 per cent.
The announcement is expected to put a halt on imports of Japanese cars when the additional tariff is levied.
Qie said some dealers have already raised prices by 10,000-20,000 yuan (US$1,210-US$2,410) since Monday, after the Chinese Government announced it would impose the special duties in response to Japan's earlier decision to place extra tariffs on Chinese imports.
Qie said the price rise still remains in a reasonable range since sales of Japanese cars remain stable.
"But the price should not rise by a big margin in the near future, and all the Japanese cars available now would be sold out in 10-15 days,'' Qie said.
Qie said Japanese car makers would be hurt the most in this trade war because "No dealers will buy Japanese cars after the extra 100 per cent tariff is levied.''
With the additional tariff, the price of Japanese cars will surge significantly. For instance, the CIF (Cost Insurance Freight) price to Tianjin for Nissan Cefiro would jump to some 55,000 yuan (US$6,650) from the current 36,000 yuan (4,300).
Qie said if the deadlock continues for a long time, Japanese cars, which accounts for over 50 per cent of imported cars in China, would lose its market.
Yang Hongjia, a spokeswoman from the Beijing office of Toyota, said "The tariff is so high that it would damage Toyota very much. The company hopes that the two governments would, under the consideration of free trade, solve the dispute as early as possible,'' she said.
Toyota exported 7,700 cars to China last year, surged by more than half year-on-year. In the January-May period,it sold 5,100 cars.
Zhang Weiyuan, manager of the Capital Development Trade Company-a Japanese auto dealer-said domestic Japanese car dealers would also be big losers because most of them ordered Japanese cars three months ago.
"We paid Japanese car-makers, but now have to leave the cars in Chinese customs because we wouldn't pay the high tariff, since no one would buy cars that expensive,'' he said.
Zhang said he fully supports the government's decision.
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