Taikoo Motors Ltd (太古汽車), the exclusive distributor of Volkswagen cars in Taiwan, has become the first vendor to announce price reductions for imported vehicles, a move which is in line with a forthcoming tax cut.
Taikoo announced on Thursday that it had reduced price tags with immediate effect for Volkswagen vehicles with engine capacities less than 2,000cc by 1.4 percent, with savings ranging from NT$10,000 to NT$20,000.
Prices for cars with engines larger than 2,000cc will be lowered by NT$100,000 to NT$200,000, a 6.4 percent reduction.
"The move is to reflect the upcoming tax reduction," Taikoo said in a press release.
Obligation
After officially becoming a member of the WTO in 2002, Taiwan was obliged to lower import taxes for foreign vehicles to 21.8 percent from the current 23.2 percent by next January.
Commodity tax for vehicles of 2,000cc and above will have to be reduced from 35 percent to 30 percent within the same timeframe.
Taikoo is aiming to boost the demand for Volkswagens by taking the lead in cutting prices.
For the first three quarters of this year, Volkswagen was the second-most popular imported car brand, selling a total of 6,046 units, according to statistics compiled by the Ministry of Transportation and Communications.
Sluggish market
The company is the only brand that reported a growth in sales in the sluggish imported car market, which has been adversely affected by consumers' card debts, high gasoline prices and political turmoil.
Toyota is the No. 1 imported brand with 7,452 units sold, while Mercedes-Benz was third with 4,651 sold.
Other automobile vendors said they are revising price strategies to move in line with the tax cut.
"We are negotiating with our Japanese partners and we hope to bring down prices of imported models by 5 percent early next year, but we haven't yet finalized the details," said Steven Yang (楊湘泉), spokesman for Hotai Motor Co (和泰汽車), which distributes Toyota and Lexus cars.
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