Pricing Luxury Cars in China

This article in the WSJ reports that Audi and other luxury ca manufacturers are cutting prices of their cars and parts sold in China. It raises some interesting questions.

1. Why are margins for parts so high?
2. Why is the price of a Range Rover at least 1.89 million yuan ($305,000) in China, while the same vehicle could be bought for the equivalent of $87,000 in the U.S?
3. Would prices tend to increase or decrease as volume increases?
4. Why luxury car manufacturers and retailers want retailers to refrain from discounting the list price?
5. Are the interests of the manufacturers and retailers aligned over what price to charge?