SALES leaders in China's mid-to-high-end car market are cutting sticker prices to defend their market positions in advance of the launch of Volkswagen's highly anticipated Magotan sedan.
Toyota's Chinese venture has expanded production capacity for its popular Camry, aiming to shorten customer waiting times before the Magotan hits the market in October.
The Camry, whose prices start at 197,800 yuan (US$26,026), was the top seller in the profitable mid-to-high sector for more than six months, with monthly sales of more than 12,000 units.
The market price for Shanghai Volkswagen's Passat Lingyu, 183,800 yuan, has been cut by as much as 23,000 yuan to compete with the Magotan, which is part of Passat's worldwide lineup.
The market reshuffle came after FAW-VW, Volkswagen AG's venture with First Automotive Group, debuted the long-awaited Magotan on the Great Wall on Wednesday night. The car, equipped with a 1.8-liter or 2-liter engine, will sell for between 192,800 yuan and 249,800 yuan.
Some analysts expect the FAW-VW's Magotan to challenge Camry's leading position and slow down the sales of the previous generation of Passats sold by Shanghai VW.
"The Magotan should be more attractive to individual buyers, leaving the Lingyu more suitable for business use," said Zhong Shi, an independent analyst. "As a more localized product, the Lingyu could survive through its pricing strategy."
Volkswagen AG, the biggest overseas carmaker in China, held a 19 percent share of the country's car market in the first half after boosting sales by a quarter to 431,369.