The success of the BMW X7 is under threat because of the trade war between China and AmericaJuly 20, 2018
Financial tension between the United States and China is growing. President of America Donald Trump, the day before, introduced new duties on imported goods from China, and the government of the Middle Kingdom did not tolerate and introduced the reciprocal duties, which hit everyone except American brands.
As part of Donald Trump’s attempt to stimulate production in his home country, additional duties on cars and other goods from China were introduced. According to the idea of the American president, this will allow us to bring American goods into the competitive price segment. To be more precise, cheap Chinese goods would no longer be so cheap, and accordingly domestic industry, and the state budget, should grow. But now everything is not so smooth.
As previously reported, China did not stand on ceremony and introduced reciprocal duties, which already affected the cost of cars in the Middle Kingdom. But as practice showed, the main victims were German brands BMW and Mercedes. The fact is that American car brands are either poorly represented, or have localized production in China. Therefore, duties on them have affected, but not much.
In particular, Mercedes and BMW had big plans for American factories, where they invested huge sums. And BMW is the largest automobile exporter from the USA, including to China. One of the plants of the Bavarian concern in Spartanburg, from which the crossovers X3, X4, X5 and X6 all over the world. There are 10 thousand people working here, and several tens of thousands of crossovers go off the assembly line every month – in June 2018, for example, almost 36 thousand cars were produced.
And this plant was chosen by the company to produce a new flagship X7, for the adjustment of production which was invested more than $ 600 million. And it is no secret to anyone that for the new crossover the main market is China, and only then the US.
Of course, the company will find a way out of the situation, but the financial profitability of the new model, and most importantly, the brand’s confidence in the United States of America will fall dramatically. Perhaps, soon the countries will come to an agreement, or any exceptions will be introduced.