Chinese carmakers told by Beijing to self-regulate in market; group blames BYD for ongoing price wars

Senior executives of several Chinese EV makers were summoned to Beijing to “self-regulate”, Bloomberg reported.

“A certain automaker has taken the lead in launching significant price cuts and many companies have followed suit, triggering a new round of ‘price war’ panic,” according to a statement issued by the China Association of Automobile Manufacturers, sighted by CNBC.

The associated warned of further pressure on profit margins and consumer safety risks, and called for companies to abide by fair competition and not monopolise the market or dump stock at prices below production cost, CNBC reported. The association’s comments were aimed at BYD, which rolled out the latest round of discounts in May when one of its models received a price cut of more than 30%.

Chinese carmakers told by Beijing to self-regulate in market; group blames BYD for ongoing price wars

The minister of industry and information technology of China said that it will increase regulation of non-productive competition, and cooperate with other departments to enforce laws to promote fair competition, according to the report.

Meanwhile, Geely CEO Li Shufu has stated that the automotive industry is facing “serious overcapacity”, and the automaker has decided to not build new manufacturing plants or increasing production from existing facilities, reported Reuters.

The claimed overcapacity come after Chinese carmakers have been involved in a price war, and an instance of Geely’s involvement was when the Geely EX5 became heavily discounted in Thailand earlier this year.

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