Although Volkswagen has denied the rumour of “general price hikes in April” for its passenger cars in China, speculations for car price increases in China are still rampant.

Mr Rao Da, Secretary-General of National Passenger Car Information Exchange Association, suggested that car price inflection points may appear this year or the next. Due to rising raw materials and labour costs, it is expected that cost per car may increase by 1500 to 3000 yuan (RMB:USD = 7:1) in 2008. Even for upgraded models, the cost would still increase due to the associated moulding, inspecting and machinery tools. But the fierce competition in China’s auto market has deterred most auto companies from unilateral price hikes.

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