Shanghai VW Vehicle Price Cuts See Little Result

Shanghai, March 3, 2009: (Gasgoo.com) Shanghai Volkswagen has recently cut vehicle prices by nearly 12% in order to lure customers amid slowing demand, but this marketing strategy is not very productive as the company's sales have not grown much as expected, xinhuanet.com reported today.

Two weeks ago, Shanghai VW cut the prices of its 2.0L Touran MPV to between 149,800 ($21,920) to 171,800 yuan from 169,800-189,800 yuan. The prices of its Polo series of compact cars were slashed to as low as between 85,800 and 122,600 yuan, from 90,800-133,000 yuan. Prices of Santana Vista sedans fell from 132,800 yuan to 124,800 yuan.

But the joint venture's 4S stores in Shanghai said yesterday that the price cuts have not produced obvious results yet except that the number of car viewers, rather than car buyers, has increased considerably. The sales have seen no much growth.

Amid the market downturn, many automakers in China are very cautious about price reduction. Most of them have not announced any plans to cut prices of their vehicles.

Industry insiders also noted that other Chinese automakers would be unlikely to follow in the footsteps of Shanghai VW to cut vehicle prices as their current inventories are low after reducing the output in the recession period.

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