Reynard Daren said:
Hello guys!
I am moving to China for work so I checked the local price of cars. They are ridiculously high. I am not sure why even though China is already a WTO country. Should I buy a car in the UK, which offers a much cheaper bargain? Or should I buy it in China, where price of car is high? Say, if I get one in the UK, how much will it cost me to deliver it to China and is it plausible and in other words, if China adds tariff and tax on imported goods, will it actually make the foreign cars more expensive than local cars?
The China Customs Tax breakdown is something like this:
Under 3.0L = 66% Tax (Based On China Customs Valuation Of Vehicle)
3.1L - 3.9L = 95% Tax (Based On China Customs Valuation Of Vehicle)
Above 4.0L = 145% Tax (Based on China Customs Valuation Of Vehicle)
Please note that the huge tax is against the value China Customs puts on your vehicle. They claim to have a "very complicated system of calculations" that they use to compute the figure. Basically, it appears they choose a middle ground (probably higher than "middle") between KBB (Kelly Blue Book) value and their interpretation of Chinese market value.
Then there are additional costs as well. Freight and insurance aside, there is a hefty Acquisition Tax (50,000rmb+) and a "Customs Port Handling Fee", among others.
As an example scenario:
If you wanted to import a 2005 Range Rover HSE to China, your costs might look something like this: (in RMB / Yuan)
¥170,000 - ¥270,000 = Vehicle Purchase Price In Home Country
(*¥350,000-¥500,000 = Possible China Customs Valuation Of Vehicle*)
¥500,000 - ¥725,000 = 145% Customs Tax (4.4L Engine)
¥75,000 - ¥150,000 = Additional Costs (Freight, Aquisition Tax, Registration, etc.)
TOTAL:
¥745,000 = Possible Minimum Cost In Completing Vehicle Purchase And Legal Import
¥1,145,000 = Possible Maximum Cost in Completing Vehicle Purchase And Legal Import
The costs are hard to swallow, but if you play around with enough different scenarios, you might find something that is acceptable to you. If you are very effective at completing the import as cheaply as possible, you can still get in under Chinese market value. It's just a matter of how hard do you want to work for it.
It does make sense that a country of 1.6+ billion people would need to avoid making it too easy for people to get cars. Especially considering the infra-structure is mostly used/needed for industry. As was touched on earlier in the thread, a lot of the wealthy here are
very wealthy and thus can afford the exclusivity. China has not yet fully adopted a lot of big money-sinks (yachts, jets, high-value real estate, etc), so vehicles seem to remain the primary status symbol here.
I have been living in China for a couple years now, and am still renting a car. Have looked into many different options to purchase a vehicle I would want, but thus far to no avail. The aspect I can least understand is the used car market here. It seems people think they can drive a car for several years and only lose a tiny percentage of what they paid. It's really hard to understand for us Westerners, where we lose 20-30% as soon as we drive it off the lot, haha.
Anyways, if you have any questions feel free to drop me a line. I'd be happy to help out a China newcomer any way I can.
Cheers.