Discounted Luxury

Luxury comes at a cheap price in China. Or so it seems, going by the unprecedented discounts on offer for Mercedes-Benz cars. Merc dealers in China are offering huge discounts — up to 25 per cent — on high-end models such as the S300 sedan, according to data going back to 2009 on cheshi.com, a popular site which tracks prices at more than 3,000 Chinese dealerships.

BMW's 7-series and Audi's A8Ls sell for 20 per cent below sticker prices, while waiting lists have vanished and salesmen are dangling perks ranging from free iPhones to Hermes bag coupons.

While Chinese car buyers may not be complaining, the worry for other luxury carmakers such as Daimler is that the incentives are likely to get even bigger.

The discounts, which began late last year with entry-level models, are spreading to the priciest sedans as the world's second-largest economy slows down and China's rich find an increasing abundance of vehicles to choose from.

(This story was published in Businessworld Issue Dated 02-04-2012)