Chinese carmakers reduce discounts after Beijing's warning, but no end in sight to price war
The average discount offered by mainland Chinese
electric vehicle (EV) and petrol car manufacturers fell to 16.7 per cent last month from an unprecedented 17.4 per cent in June, according to a recent JPMorgan report.
'This is encouraging, as intense competition – especially after the Shanghai Auto Show in April – sent industry-wide discounts to a record high of over 17 per cent in May, June and early July, the highest since we started tracking pricing trends in China in 2017,' said Nick Lai, head of auto research in Asia-Pacific at JPMorgan.
'However, the root cause of the challenging price environment is overcapacity. We may need to be patient to see a sustainable [and] better price environment in the long term.'
JPMorgan's data covered 40 foreign and Chinese car brands across 1,000 variants, including imports.
BYD electric vehicles seen at a car show in Bangkok, Thailand. Photo: Reuters
In late May, the Chinese government intervened in the automotive market over concerns that fierce price competition could jeopardise the EV sector, where mainland companies lead globally, according to analysts.
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