SHANGHAI -- Three German luxury automakers have triggered a price war that threatens to engulf the entire Chinese auto market.
The war, which has shown no signs of abating, already has produced its first batch of winners and losers.
The war in China's luxury sector was started by Mercedes-Benz, according to Wang Cun, chief analyst with China Automobile Trading Co., China's largest imported-vehicle dealer.
"In February, Mercedes-Benz cut the price of its imported S-class sedan by 200,000 yuan [about $31,600 at current rates] to ease inventory pressure and prepare for the launch of the next-generation S class into China," said Wang.
The move spurred Mercedes' two archrivals, Audi AG and BMW AG, to follow suit with equally deep price cuts for corresponding models.
A price war quickly erupted. In the past three months, the German luxury brands have applied sweeping price cuts to the full range of their products.