A top industry group had a stern rebuke yesterday for carmakers fuelling a “price war”, a week after Chinese EV giant BYD announced sweeping trade-in discounts, with multiple competitors following suit.
“Since May 23, a certain carmaker has taken the lead in launching a substantial price drop campaign... triggering a new round of ‘price war’ panic,” the China Association of Automobile Manufacturers (CAAM) said in. The group warned that such “disorderly” competition would “exacerbate harmful rivalry” and hurt profit.
The statement did not single out any company by name, but on May 23, BYD announced it was offering big trade-in discounts on nearly two dozen makes, offering discounts of up to 34 per cent.
Its cheapest model, the smart-driving Seagull, now goes for a starting price of 55,800 yuan ($7,800), down from 69,800 yuan, with a trade-in.
Days later, Stellantis-backed Chinese EV startup Leapmotor announced similar discounts on two “entry-level” models through June 8.
Geely Auto announced on Friday limited-time trade-in subsidies for 10 models, with its X3 Pro going for the lowest starting price of 44,900 yuan.
Beijing has poured vast state funds into the electric vehicle sector, supporting the development and production of less polluting battery-powered vehicles. But China’s carmakers association yesterday warned its goliaths to play fair.
“Leading companies must not monopolise the market,” the CAAM statement said.
It added that “with the exception of lawful discounting, companies must not sell products below cost nor engage in misleading advertising”.
Such behaviour disrupted the market and harmed both consumer and the industry, it said.
An official from China’s Industry and Information Technology Ministry added that price wars “produce no winners and no future”.
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