German carmaker BMW said it will raise the prices of two U.S.-made crossover sport-utility vehicles in China to cope with the additional cost of tariffs on U.S. car imports into the world’s biggest auto market.
In a move due to take effect on Monday, BMW said in a statement to Reuters over the weekend that it will increase maker-suggested retail prices of the popular, relatively high-margin X5 and X6 SUV models by 4 percent to 7 percent.
The rates of increase suggest that BMW is willing to absorb much of the higher costs stemming from bringing the SUVs to China from its factory in South Carolina, underscoring the fierce competition among luxury car brands in China.
BMW’s move comes after China imposed new tariffs earlier this month on about $34 billion of U.S. imports, from soybeans and cars to lobsters, as part of a widening trade row. Beijing, which this year cut tariffs on all automobiles imported into China, slapped an additional 25 percent levy on U.S.-made cars as of July 6. As a result, China now levies a 40 percent import duty on all cars imported from the United States.
“BMW stands for free (trade) but can’t stand still without taking actions to respond to the market changes,” a BMW spokeswoman said in an email message to Reuters.