Mercedes Benz to cut prices of over 10,000 spare parts in China

Daimler AG's Mercedes-Benz said the German luxury auto brand would cut prices of over 10,000 spare parts by 15 per cent on average. The announcement comes less than a month after its announcement of a sweeping cut in prices for repair and maintenance services.

The move was announced over the weekend on Merecdes-Benz's China market website. Meanwhile, China's anti-monopoly regulators are increasing pressure on global automakers to do away with what they consider price-gouging on repair and replacement components by many foreign auto brands.

China is increasing efforts to bring companies in compliance with an anti-monopoly law enacted in 2008, after, targeting in recent years several industries ranging from drugmakers and milk-powder producers to jewelLers and technology firms.

Such investigations had led to massive fines on several multinational firms including Mead Johnson Nutrition Co and Danone SA.

Starting 1 September, Mercedes-Benz would  voluntarily reduce prices of more than 10,000 spare parts by 15 per cent on average, covering all of its models in China, "in response to an anti-monopoly investigation" by the National Development and Reform Commission (NDRC) into the auto industry, according to the company's e-mailed statement today.

The price cuts would be in addition to a programme it launched in China last month through which it reduced service charges and corresponding spare part prices by an average of 20 per cent, a company spokesman said.

Marc-Oliver Nandy, executive vice president of after-sales for Mercedes in China, said in a statement that the reduction "would further lower the usage cost for our customers and would improve Mercedes-Benz's competitiveness in the after-sales market."

The company, in July, had already lowered its maintenance prices by around 20 per cent.

The price adjustment comes at a time when the auto sector is under an antitrust investigation launched by China's top economic planner, the National Development and Reform Commission (NDRC), and the Ministry of Commerce.

A number of premium auto brands had already decided to lower their prices recently.

The China unit of UK high-end auto brand Jaguar Land Rover, for example, said on 25 July that prices of three models in China would be cut by around 200,000 yuan ($32,366.13) each on average.

FAW-Volkswagen Automotive Co, which produces Mercedes-Benz' rival brand Audi in China, announced on 26 July that it would lower the prices for spare parts.

The company said in an statement e-mailed to the Global Times in late July, that its Audi unit had been "actively" cooperating with the investigation launched by the Chinese authorities.

According to commentators with Mercedes-Benz following suit, BMW another premium auto brand in the Chinese market, too would very likely make similar decisions, Wu Shuocheng, editor-in-chief at industry portal auto.gasgoo.com, told the newspaper said yesterday.