(Reuters) – General Motors Co (NYSE:GM) on Monday cut the starting price for the Cadillac Lyriq in China by almost 14%, joining Volkswagen (ETR:VOWG_p) in a new round of electric vehicle price reductions in a market where global automakers are under pressure.
The Lyriq, a luxury crossover based on GM’s Ultium EV architecture, is now priced from 379,700 yuan ($52,466) from 439,700 yuan ($60,784) previously, according to GM’s China website.
GM also offered an additional discount equivalent to almost $2,500 for Lyriq buyers who put down a deposit in China before the end of August.
GM’s move came just after Volkswagen cut prices on its EVs in China, where the market share of made-in-China EV brands is rising and the market faces intense price competition.
VW’s joint venture with state-owned automaker FAW on Friday announced discounts of between 8% and almost 27% on its ID-series of electric vehicles.
VW’s other joint-venture with state-owned automaker SAIC offered a limited time discount on the ID.3 hatchback, another VW EV, by the equivalent of just over $5,100. That put its starting price below the Qin EV from BYD, one of China’s most popular models.
VW is China’s top-selling foreign automaker.
Since January, when Tesla (NASDAQ:TSLA) cut prices in China, about two dozen automakers have followed with price cuts of their own to stay competitive and stoke demand.
China’s auto market, the world’s largest, is on track for overall growth of about 3%, with the share of EVs and plug-ins rising fast. Consultancy AlixPartners forecasts this will be the first year made-in-China brands top 50% of their home market.
Those changes have created intensifying competition over price and features that have both driven EV sales and threatened industry-wide profitability, analysts say.
China’s auto association on Saturday withdrew a pledge it had brokered among 16 automakers, including Tesla, to avoid “abnormal pricing,” saying it recognized that would violate antitrust law.
GM CFO Paul Jacobson said last month the Lyriq represented an opportunity for the automaker in China. Cadillac sales were down almost 8% in China last year, industry data shows.
The Lyriq, which starts from just under $59,000 in the United States, has had a slow rollout since its introduction last year. GM officials said U.S. pricing remains unchanged.
GM sold 2,326 Lyriqs in the United States in the first half of the year. It sold 918 in China in the first quarter, according to data from the China Association of Automobile Manufacturers, which is set to announce first-half sales data later this month.
GM said on Monday it delivered more than 526,000 vehicles in China in the second quarter, up 9%. Of that total, over 115,000 were EVs.
($1 = 7.2370 Chinese yuan renminbi)
