Morgan Stanley: BMW China lowers suggested retail prices by up to 20%, expects dealers to benefit in the short term

Morgan Stanley's research report indicates that, according to the bank's channel survey, BMW China will generally reduce its suggested retail prices by 10% to 20% starting from January 1 of this year, mainly affecting imported models such as the 7 Series, 6 Series, M Series, and i Series electric vehicles.

The bank believes that the purpose of this measure is not to engage in price competition, as BMW China's dealers have been offering discounts significantly below the suggested retail prices for some time. Therefore, even with the suggested retail price reduction, the bank expects the actual transaction prices to remain roughly unchanged.

For dealers, the bank believes that YONGDA AUTO (03669.HK), ZHONGSHENG HLDG (00881.HK), and MEIDONG AUTO (01268.HK) will benefit slightly. With the suggested retail price reduction, dealers can also enjoy lower procurement costs, which will immediately enhance their gross profit on new car sales. However, the additional rebates that dealers receive in the future may also decrease, as the rebate amounts are determined by the manufacturers