Daimler cuts Swiss Mercedes, Smart Car prices 18% on SNB move

[FRANKFURT] Daimler AG is cutting car prices in Switzerland after the central bank's surprise abandonment of a minimum exchange rate caused the franc to surge versus the euro, the latest example of deflationary pressure in the country.

Daimler is offering a "currency rebate" of 18 per cent off the list price of Mercedes-Benz and Smart autos, the Stuttgart, Germany-based manufacturer said in a statement on Tuesday.

The Swiss National Bank sent shockwaves through equity and foreign-exchange markets after deciding on Jan 15 to drop a policy to prevent the national currency from strengthening beyond 1.20 francs to the euro.

The franc, which traded at about 1.01 per euro on Tuesday, has gained against most currencies since the SNB's move, lowering the cost of items imported into Switzerland while making exports from the country more expensive.

Zurich-based tour operator Kuoni Reisen Holding AG said on Monday that it's cutting prices for package trips to the Mediterranean for Swiss customers by 15 per cent.

Luxury retailer Bongenie Grieder announced a 20 per cent price cut at its stores. Conversely, watchmaker Rolex Group is raising its prices in Japan, and competitor Patek Philippe is considering a similar move, after the franc's 17 per cent jump against the yen.

BLOOMBERG