VW China Cuts Prices

SHANGHAI Aug 6, 2007; Reuters reported that Volkswagen AG cut prices on a flagship model at its Shanghai venture by up to 7 percent, effective on Monday, to help push sales in China's fiercely contested market.

Shanghai Volkswagen, the auto maker's car manufacturing venture with Shanghai Automotive Co., has reduced prices for its Passat Lingyu -- rolled out in November 2005 -- by as much as 16,200 yuan ($2,143), the venture said over the weekend.

Although China's auto market is growing strongly, car makers have been cutting prices, especially on older models, to attract buyers.

In March, the top European auto maker lowered the price of several locally made cars by up to 11 percent, including Santana and Polo models.

Rival General Motors in January cut prices by as much as 10 percent on its Chevrolet Lova and Aveo economy cars.

In the first half of the year, Volkswagen sold a record 431,369 vehicles in mainland China and Hong Kong, up 24.6 percent from a year earlier.

For the full year, the top European automaker, which also operates a car manufacturing venture with leading Chinese auto maker FAW Group, aims to increase its sales by roughly one-fifth and maintain its 17 percent share of the world's second-largest auto market, a senior company executive told Reuters in April.