Warning for Chinese car companies from price war after the wave of discounts

The Chinese Automobile Manufacturers Association directed (CaamSaturday, a strongly worded reprimand for automotive companies for raising a price war, which will lead to the outbreak of harmful competition, a week after the announcement of the Chinese giant electric car company, BYD (Byd) On wide discounts, to join several companies.

The association said in a statement posted on its account on the Witchhat platform (WeChat) “Since May 23, a car manufacturing company has launched a major discount campaign … which again raised fears of a price war.”

The association warned that such competition, which is “dominated by chaos”, would lead to “the spread of harmful competition” and undermining profits.

The statement dated May 30 did not mention any company by name, but on May 23 it was announced Byd About large discounts, which amounted to 34% when swimming more than twenty styles of its cars.

Hence, the Siggal model became Seagull The smart driving, which is the cheapest company, is displayed at a price starting from 55800 yuan ($ 7800), down from 69,800 yuan, when replacing an older car.

A few days later, Lybotor announced Leapmotor The emerging Chinese supported by Stelinsus StelantisFor similar discounts on new models that apply until June 8.

As for Jelly Auto Geely Auto Friday announced a discount for a limited period that includes ten models, with the launch of a model X3 Pro At a primary price of 44900 yuan.

But local criticism is increasing against “sterile competition” as the association calls it.

The CEO of Great Wall Motor compared Great Wall Motor The annual revenue is about a quarter of revenues BydThe current situation at the beginning of the long recession in the Chinese housing market, which was raised by the crisis of the company of Afgrand Evergrande Real Estate for paying its debts in 2021.

Wei Jiangon said in an interview with Sina Finance Sina Finance Chinese this month, “The auto sector is already suffering from a crisis similar to the Efarrand crisis. I hope that all these years do not go from hard work.”

The state has bestowed the money on the electric car sector in support of the development and production of lower battery -powered vehicles.

However, the Chinese Auto Manufacturers Association warned in its statement on Saturday the major companies of monopolistic practices by saying, “The leading companies should not monopolize the market. With the exception of legal discounts, companies should not sell their products of less than their cost, or engage in misleading ads.”

She said that such practices confuse the market and harm the consumer and the industry alike.

Global Times reported Global Times The state -backed by an official in the Chinese Ministry of Industry and Information Technology was not named as saying that price wars are “sterile and not profitable.”