SHANGHAI -- General Motors has slashed prices of two Buick models in China by as much as 15 percent to counter a move by Japanese rival Honda Motor Co., dealers said on Friday.
GM's main domestic venture said in a statement that retail prices on its Buick Regal would now start at $24,625 and prices on its Excelle sedans would start at $14,475. It did not specify previous pricing.
But two dealers said that amounted to as much as a 10 percent discount on the Regal and 14.7 percent on the Excelle -- days after Honda began offering sedans at a 7 percent discount, setting off the latest round of discounting to convulse the world's third-largest vehicle market.
Chinese car prices have headed south for years as foreign automakers boost capacity to grab a slice of the fast-growing market, squeezing margins for the likes of Volkswagen.
Global automakers including Ford Motor Co., Nissan Motor Co. Ltd. and Toyota Motor Corp. are investing more than $13 billion in China to triple annual production to about 6 million cars by 2010.
Discounts are taking on new significance in a decelerating market as Beijing applies the brakes to slow a racing economy and restricts auto loans, keeping buyers at home.
Government credit curbs in 2004 reduced the growth rate of car sales to 15 percent from almost doubling in 2003, when it was the world's fastest-growing auto market.
Analysts now expect the car market to grow just 10 percent in 2005 after rising 15.2 percent in 2004 to 2.33 million units, which followed a near-doubling in 2003.
GM is the No. 2 player in China behind VW. The country yielded a fifth of GM's earnings in the third quarter, but analysts warn the outlook may be clouded by persistent market weakness and by price wars that picked up in mid-2004.