On Saturday, China asked car makers to stop heavy price wars that are hurting the industry and making it hard to grow in a healthy way. Recently, some big car companies have been lowering prices a lot to attract buyers, which caused tension among them. This price fighting started in early 2023 and hasn’t stopped, even though both the government and the car industry are worried.
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China’s industry ministry said it will work with law enforcement to stop unfair competition and may use rules to fix the problem. They said on their WeChat account, “No one wins in a price war, and it’s bad for the future.” They want to protect buyers and help the car industry develop well.
These comments came after BYD, a big electric car company, offered big discounts last week on over 20 car models. Other companies like Geely and Chery also cut their prices to compete.
The China Association of Auto Manufacturers (CAAM) also asked car companies to stop the price wars. They said these price cuts hurt profits and efficiency. They mentioned that the price war panic started again after a big discount was given by an unnamed car maker on May 23.
CAAM suggested that car companies should compete fairly and that big companies should not try to control the market. They also said businesses should not sell cars below cost.
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BYD’s discounts, including government trade-in offers, can reduce the price of its BYD Seagull electric car to as low as 55,800 yuan (about $7,750).
Last Friday, a BYD executive criticized a comment from Great Wall Motor’s chief, who said the industry was in trouble because of pricing pressure. Great Wall’s Wei Jianjun said these price cuts are hurting the profits of car makers.
