Friday, February 5, 2010

The Cost of a Camaro in China

The guys at China Car Times posted this entry about the biggest auto discounts in China. Topping the list is the Chevrolet Camaro with a stunning 160,000 RMB (US$23,500) discount from list. The Camaro's base price in the US is only $22,995, which is even smaller than the amount by which it is being discounted in China!

Frankly, I'm not surprised that the Camaro would need to be discounted so much. While it appeals to me as an American who remembers the '68 Camaro, it is hardly suitable for the rough streets of China or for China's fuel-conscious drivers. (Gasoline is more expensive in China than in the United States at the moment.)

What is most interesting to me about CCT's post is how much the Camaro costs in China.

The Camaro lists in China for about $117K, and is now discounted to $93K. That's $93K for a car you can buy in the US for under $30K! So if we take $30K as the cost of a nicely-equipped Camaro, and add to that a generous shipping charge of $10K, we have a car for which GM should want to collect about $40K in China.

Of course, China will want a cut of that as well. Under its WTO commitment, China may charge a maximum import tariff of 25%, which would bring the price to $50,000.

Even with a huge discount, the Camaro's price in China is still $43,000 more expensive than the same car sold in the United States. Why?

Is it demand driven? Is Chevrolet simply unable to build Camaros fast enough that they can get away with charging that much for a car in China?

What is missing here? Why is the Camaro so expensive in China?