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BMW, citing new tariffs, hikes price of 2 U.S.-made crossovers in China
Reuters | 2018/7/31

BEIJING -- BMW Group will raise the price of two U.S.-made crososvers in China to help cover additional Chinese tariffs on U.S. light-vehicle imports in the world's biggest auto market.

BMW said in a statement that it will increase the suggested retail price of the X5 and X6 by 4 to 7 percent, effective Monday.

The rate of the price increases suggest BMW is willing to absorb much of the higher costs of shipping the light trucks to China from a factory in South Carolina, underscoring the fierce competition among luxury car brands in China.

BMW's move comes after China imposed new tariffs this month on about $34 billion of U.S. imports, from soybeans and light vehicles to lobsters, as part of a widening trade dispute.

Beijing, which this year cut tariffs on all car and light-truck imports, slapped an additional 25 percent levy on U.S.-made vehicles as of July 6. As a result, China now levies a 40 percent import duty on all cars and light trucks imported from the United States.

"BMW stands for free (trade) but can't stand still without taking actions to respond to the market changes," a BMW spokeswoman said in a statement.

BMW imports the X4, X5 and X6 from the United States to China, where demand for SUVs and crossovers has been booming. Last year, the German automaker shipped more than 100,000 vehicles from the United States to China.

The company made no reference to X4 pricing.

BMW's decision to absorb much of the impact of the higher tariffs echoes an earlier move by Ford Motor Co., which said it would not increase prices for now in an effort to sustain momentum.

China-based car dealers told Reuters that BMW rival Mercedes-Benz raised prices moderately in mid-July on the GLE, a sporty midsize crossover produced in Alabama, in China.

A Daimler spokeswoman referred Reuters to comments made by the company last week.

Daimler CEO Dieter Zetsche said Thursday the carmaker was looking at ways to mitigate the impact of the trade war. This would include a review of whether to shift some U.S. production to China.

Daimler also said last week its 2018 pre-tax profits would fall from 2017 levels because the latest Chines tariffs would hurt sales of Mercedes-Benz SUVs. 

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