Not alone in the current controversy within China, BMW has decided to reduce the price of 2000 of its components, due to an Anti Trust Investigation from the Anti-Monopoly Bureau. They are not the only foreign organisation being investigated amid concerns over high prices, that affect fair trading, such is the desire own a luxury Brand such as BMW in the east.
Were There High Margins
Reductions will be of the order of 20% and it raises the question to whether huge margins were being exploited, or if BMW have no faith in any appeal and so are excepting or anticipating some sort of action that will affect their trading in China.
Other brands such as Mercedes and Chrysler are also reducing their prices, due to the investigations which have going since 2011 and effect many organisations even outside of the Auto industries, where large fines have needed to be paid.
China is renowned for making cheap “aftermarket” alternatives, but the quality of often questioned, so demand for original examples is high and affects the over price of all motors sold. There is monopoly protection in most countries, even the UK, the questions is whether China’s concerns are about an overall fairness or protection over its own loyalties.
Even in the UK, we know that genuine BMW parts are not cheap, and it not necessarily better in any other European country, such is the demand for re-cycled or reconditioned spares, before the route of aftermarket. Clearly even with the loss of margin, there will still be a profit and the risk of high fines, or even leaving the Chinese market is something not to be considered.
Therefore = China 1, BMW 0