Volkswagen escalates China’s EV price war with discounts of over US$5,000 aimed at budget-conscious drivers
- VW’s price cuts suggest that competition is getting fiercer, analyst says
- Carmaker’s two ventures are offering discounts of up to 20 per cent on battery-powered SUVs
The carmaker’s two ventures in China, FAW-Volkswagen and SAIC-Volkswagen, are offering discounts of up to 20 per cent, or 40,000 yuan (US$5,816), on battery-powered sport-utility vehicles (SUVs) in the hope of luring more budget-conscious drivers. FAW-Volkswagen is also offering buyers a free camping kit worth 4,900 yuan.
“Price reductions are being widely reported across the mainland’s automotive industry because of a sharp drop in sales,” said Eric Han, a senior manager at Suolei, an advisory firm in Shanghai. “VW’s price cuts are a sign that competition is getting fiercer.”
Sales of FAW-Volkswagen’s EVs in the first two months of 2023 dropped 8.3 per cent from a year earlier to 9,572 units, according to the CPCA. The joint venture reported sales of 221,946 vehicles – both petrol cars and EVs – in the same period, which represent a decline of 24.9 per cent year on year.
Sales numbers for SAIC-Volkswagen EVs for this period were not available, but the joint venture said sales of all vehicles in this period fell 29 per cent from a year ago to 154,631 units.