The decision of a car manufacturer that has decided to sell its cars below cost is causing quite a bit of discussion. But can it?
There car fraud it is a broad term and as such it is difficult to understand that thin red line between legality and illegality. Some are clear: you cannot use tactics to sell a car above the advertised price.
But not even misrepresentations about financial terms, or one sale or the leasing of automobiles without adequate disclosure of known defects or dangerous conditions. An automotive fraud that extends to purchases of used and new cars.
A dealer fraud lawyer Automobiles could help a client combat harmful tactics such as failure to disclose damages, the packaging pricing and misleading retailer add-ons. If the dealership sold a car above the advertised price, you could be sued for fraud.
So far everything is clear. The problem is when the opposite happens. Yes exactly, you understood correctly. In this case we go well beyond the total sell-off, we are starting to sell cars below cost with negligible prices, outside the market.
Brilliant market strategy or dumping?
In Italy, selling below cost is legal as long as it does not lead to the elimination of competition, as long as, as recently established by the Supreme Court, “does not result in damage and carries out the competitive offense of internal dumping”.
In essence, selling at prices that are not immediately profitable is contrary to the duties of fairness, only if it is “connoted as an antitrust offense, as it is carried out by a company in a dominant position and practiced with predatory purposes”.
Xiaomi’s strategy: “Yes, we sell cars below cost”
While Italy, and not only, is wondering whether the strategy of Xiaomi is legitimate, its CEO on the day of the presentation of the SU7 did not worry at all: the first electric car from the Chinese giant is sold for under 30,000 dollars for the basic model.
Just to give an example, four thousand dollars less than the basic model of the Tesla Model 3. “We have deep pockets and we expect to lose money with the SU7 – said Lei Jun half-jokingly in front of over 34 million viewers connected on Douyin – it is the most beautiful, easiest to drive and most intelligent car” . Analysts have estimated that with those prices there could be a net loss of 580 million euros. But the question arises spontaneously: can it be done?
