A top industry group last week gave a stern rebuke to automakers fueling a “price war,” a week after Chinese electric vehicle (EV) giant BYD Co (比亞迪) announced sweeping trade-in discounts, with multiple competitors following suit.
“Since May 23, a certain automaker 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 a statement posted to its WeChat account.
Such “disorderly” competition would “exacerbate harmful rivalry” and harm profit, the group said.
Photo: AFP
The statement, dated on Friday, 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 percent.
Its cheapest model, the Seagull, now goes for a starting price of 55,800 yuan (US$7,745), down from 69,800 yuan, with a trade-in.
Days later, Stellantis NV-backed Chinese EV start-up Leapmotor Technology Ltd (零跑汽車) announced similar discounts on two “entry-level” models through Sunday.
Geely Automobile Holdings Ltd (吉利汽車) on Friday announced limited-time trade-in subsidies for 10 models, with its X3 Pro going for the lowest starting price of 44,900 yuan.
However, domestic criticism was growing against what the automakers association called “involution” — a popular tag used to describe the race to outcompete that ends up nowhere.
Wei Jianjun (魏建軍), CEO of China’s Great Wall Motor Co (長城汽車), whose annual revenue was about one-quarter of BYD’s, compared it to the start of China’s years-long housing slump triggered by the 2021 default of property giant Evergrande Group (恆大集團).
“Evergrande in the auto industry already exists,” Wei said in an interview with Chinese news outlet Sina Finance last month. “I hope that ... all these years of hard work will not go to waste.”
Beijing has poured vast state funds into the EV sector, supporting the development and production of less polluting battery-powered vehicles.
However, China’s automakers association warned its goliaths to play fair.
“Leading companies must not monopolize 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 behavior disrupted the market and harmed consumers and the industry, it said.
BYD Co’s sales last month were its best this year after heavy discounts offered during the final days of the month lured customers into showrooms.
The company sold 382,476 vehicles last month, according to a statement yesterday. Of those, passenger cars were 376,930. Notably, BYD’s battery passenger EV sales of 204,369 topped its plug-in hybrid sales of 172,561, only the second time pure EV sales have been in front since early last year.
Analysts at Citi Research estimated that after BYD’s discounts, traffic to its dealerships may have surged between 30 percent and 40 percent week-on-week.
Year-to-date, BYD has sold 1.76 million units. Its target for the full year is 5.5 million.
Additional reporting by Bloomberg
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS