Prices of imported cars in China fell the most in five months, adding to signs that demand for luxury products is slowing because of a government campaign to rein in lavish spending by public servants.
Average prices of imported cars in April fell 3.4 percent from a year earlier, according to Cheng Xiaodong, head of auto-price monitoring at the National Development and Reform Commission, China’s top economic planner. That compares with the 0.2 percent increase for locally made passenger vehicles.
“It’s a special period of time as demand for high-end imported cars is being curbed,” Cheng said in a telephone interview today. “Prices of imported cars may continue to slide and demand will mainly come from private buyers in the future.”
Demand for vehicles made outside of China -- usually luxury cars because of a 25 percent import tax -- has slowed after President Xi Jinping started a campaign to reduce extravagant spending by officials and state-owned companies after becoming Communist Party chief in November. Prices of other luxury items such as Moutai liquor and Longjing tea also declined this year.
China’s Central Military Commission, headed by Xi, banned the use of military number plates on luxury cars starting this month as part of efforts to reinforce discipline and protect its image, the PLA Daily, the armed forces’ official newspaper, reported April 28.
Excessive imports last year have also added more pressure on car pricing, Dong Yang, secretary general of China Association of Automobile Manufacturers, said on May 9. The stockpile of imported vehicles was 2.39 months of sales in March, compared with the 1.5-month level that’s considered normal, according to the China Automobile Dealers Association.
— With assistance by Tian Ying