Rolls-Royce Motor Cars has pointed to China’s high taxes on luxury goods for the elevated price tags on its cars in what is now the world’s largest automotive market.
The luxury British car maker claims that despite the added expense for Chinese customers, it is only maintaining the same profit it makes in other countries.
The Rolls-Royce Ghost sedan is priced from 4.19 million yuan ($715,000) in China, while a similar vehicle costs about US$256,000 ($266,000) in the US and £170,000 ($285,000) in the UK.
The same car starts from $644,998 in Australia, of which $209,279 is taxes and other fees.
Foreign luxury car brands have recently come under fire from the government-censored Chinese media, which has pointed out that some imported cars sold in China can cost up to three times more than in other, smaller markets.
A recent report by Xinhua, China’s state-owned news agency, accused foreign car makers of profiteering and claims they are hiking up prices simply because there is a high demand for luxury vehicles in China.
The report criticised British marque Jaguar Land Rover for discriminatory pricing in the country.
Despite the controversy, Rolls-Royce was quick to defend its pricing in China.
“One should not be mistaken by the absolute price,” Rolls-Royce CEO Torsten Mueller-Oetvoes told Bloomberg this week. “The difference in price is very much taxes.”
Mueller-Oetvoes described China’s tax levels as “extremely high” exceeding other large markets such as the US, Europe and the Middle East.
There are also fees that add to the final retail price in China, he said. “For us, it is not a big difference between a car sold in China than a car sold in the US or Russia, profit-wise,” he added.
Rolls-Royce, owned by BMW Group, currently services 16 dealers in China and will add another four in the cites of Changsha, Taiyuan, Kunming and Nanning in the coming months.