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
Ryanair, Transavia, Volotea and other low-cost airlines are feeling the financial pain from high jet fuel prices as a result of the Middle East war and are cutting flights. The closure of the Strait of Hormuz has taken a huge chunk of oil supplies off the market, sending the price of jet fuel soaring and triggering fears of shortages that could force airlines to cancel flights. Airlines are not waiting for a lack of supplies to react. “Travel alert: Airlines are cutting thousands of flights right now,” Travel Therapy host Karen Schaler said in an Instagram reel this past weekend.
MANAGING RISKS: Taiwan has secured LNG sufficient to cover 95 percent of electricity demand for next month, UBS said, describing the government’s approach as proactive UBS Group AG has raised its forecast for Taiwan’s economic growth this year to 8 percent, up from 6.9 percent previously, and said expansion could reach as high as 8.6 percent if external energy shocks are avoided. The upgrade reflects a stronger-than-expected first-quarter performance and sustained momentum in artificial intelligence (AI)-driven exports, which UBS said are providing a firm foundation for growth despite geopolitical and energy risks. Taiwan’s GDP expanded 13.69 percent year-on-year in the first quarter, the fastest growth since the second quarter of 1987, the Directorate-General of Budget, Accounting and Statistics (DGBAS) reported on Thursday. On a seasonally
The Fair Trade Commission’s (FTC) ongoing review of Grab Holdings Ltd’s US$600 million acquisition of Foodpanda Taiwan’s operations, announced on March 23, has taken on fresh urgency as industry experts warn that the transaction could embed significant Chinese cybersecurity vulnerabilities into Taiwan’s digital infrastructure through Grab’s deep ties to autonomous-driving firm WeRide (文遠知行). Less than 16 months after the FTC blocked Uber Eats’ direct attempt to acquire Foodpanda Taiwan — citing potential combined market shares of 80 to 90 percent — the emergence of Grab as the buyer has prompted questions about whether the same competitive harm is simply being rerouted
The list of Asian stocks that benefit from business partnership with Nvidia Corp is getting longer, as the region further integrates into the artificial intelligence (AI) chip giant’s business ecosystem. Just in the past week, South Korea’s LG Electronics Inc, Taiwan’s Nanya Technology Corp (南亞科技), as well as China’s Huizhou Desay SV Automotive Co (德賽西威) and Pateo Connect Technology Shanghai Corp (博泰車聯) have become the latest to rally on news of tie-ups, supply-chain participation or product collaboration with the US chip designer. Asian suppliers account for about 90 percent of Nvidia’s production costs, up from about 65 percent last year, data compiled
RSS