Chinese dealerships could gain 1.5 to 1.8 million CNY profits over a ultra luxury vehicle priced at 7 million CNY ten year ago, while currently the profits sank to about 500,000 CNY.

Additionally, the weakening RMB currency made it worse by cutting more than 200,000 CNY in the 500,000 CNY profits.Thus the actual profits for an ultra luxury vehicle decreased more than one million CNY to about 200,000 CNY.

The depreciation of RMB not only affected the profits of imported vehicle dealerships but also retarded the sales growth in a way. If the devaluation continues for a long period in the future, imported vehicle manufacturers may raise the selling price of ultra luxury vehicles, according to professional prediction.

Since some luxury vehicles dealerships use US dollar to settle accounts, the weakening of the RMB against the US dollar exerted the biggest influence on large-scale vehicle foreign trade by further lowering the profits. Some dealerships with large-scale imported vehicle business could receive one million orders in a month, among which there were ultra luxury vehicles and general vehicles. The total value of the million order reached 50 million CNY. And the depreciation of RMB in two days cut 1.75 million out of the profits.

A few days ago, it could be easily found that imported vehicles were sold with more than ten thousand and even dozens of thousands discounts, which yet would be cut down as the weakening RMB pulled down the profits for dealerships. In particular, the middle and low end imported vehicles could hardly make profits for dealerships.The newly imported vehicles won’t enjoy as much discounts as before. On the other hand, the discount reduction will restrict sales growth. For those, who could afford ultra luxury vehicles priced at several million CNY, discounts of around ten thousands or zero made little difference for their purchase decision, while two or three thousand price raise could discourage a large part of consumers for general imported vehicles at several hundred thousand CNY.

Source:Gasgoo