Jaguar Land Rover is cutting prices in China after being hit by sliding sales in the world’s biggest car market.
Demand for the British-designed luxury sedans and four-wheel-drives has slumped during a slowdown in the Chinese economy and continued campaign against corruption that is deterring some Chinese from making extravagant purchases.
Some industry figures think Chinese consumers are also delaying purchases because they believe the prices of luxury western cars will come down following an investigation by Chinese competition authorities. China has been clamping down on foreign carmakers, highlighted by a 350m yuan (£38m) fine on Mercedes Benz for alleged price-fixing earlier this year.
Jaguar Land Rover said its latest pricing decision reflected market conditions and was not connected to competition regulation.
The price of the group’s JV Evoque Range Rover will be cut by 5-6% immediately in China, while the latest model of the Jaguar XE will be cheaper from September.
The price changes will not apply in the rest of the world, where Jaguar Land Rover sales have been roaring ahead. Sales in continental Europe were up 28%, with France, Germany, Italy and Spain leading the way. Sales were up 21% in the UK with strong demand for Range Rovers, while trade was similarly brisk in North America, with sales up 13%.
But the China slowdown still weighed on Jaguar Land Rover, which is one of the UK’s most lucrative export companies and employs 25,000 workers across the West Midlands and Liverpool. Car sales for the three months to 30 June slipped to £5bn, a 7% drop on the same period last year.
Economic conditions had become “more mixed” in China, the company said, although it was upbeat about the prospects for the future. “China will continue to be a growing market for premium vehicles,” it said, noting that “increasingly affluent consumers [in China] … will aspire to owning luxury vehicles”.
Jaguar Land Rover is owned by India’s Tata Motors, which announced a 49% fall in profit, mostly as a result of weak growth in China.
