China urges halt to auto industry's bruising price wars
SHANGHAI: China called on Saturday for its automotive industry to halt brutal price wars, as a threat to the sector's health and sustainable development, after key executives jousted over pricing pressure following large discounts offered to buyers.
Tension between some top players has spilled into the open as competition intensifies in the world's largest auto market, with price wars begun in early 2023 showing little sign of abating, despite concern among both government and industry.
The industry ministry said it would join hands with law enforcement agencies to tackle unfair competition and take necessary regulatory measures.
'There are no winners in a 'price war', let alone a future,' it said in a statement on its WeChat account, vowing to safeguard consumers and promote high-quality development of the industry.
The remarks came after fresh incentives offered last week on more than 20 models by electric vehicle giant BYD that prompted several rivals, such as Geely and Chery (CHERY.UL), to follow suit.
Trump auto tariffs: President slaps 25% duties on car imports to US
The ministry's comments echo a similar call on Saturday by the China Association of Auto Manufacturers (CAAM) for a truce in the price wars, saying they affect profitability and efficiency.
It added that a new round of price war 'panic' was touched off in China after substantial discounts offered on May 23 by an automaker it did not identify.
It proposed remedies such as auto companies adhering to the principle of fair competition and larger players refraining from market monopolies.
'Apart from reducing the price of goods according to law, enterprises shall not dump goods at prices below cost,' it added.
BYD's incentives, which include government trade-in subsidies, can cut the domestic cost of its BYD Seagull electric hatchback to as little as 55,800 yuan ($7,750).
On Friday, a BYD executive decried as alarmist comments by the chief of Great Wall Motor that the industry was 'unhealthy'.
Great Wall's Wei Jianjun had said pricing pressure was hammering industry bottom lines.
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