China’s auto market has seen four rounds of price wars in just three years — and the battle is far from over. While consumers cheer the falling prices, many automakers are suffering. As signs of another wave of discounting emerge, industry associations and regulators are stepping in with rare public warnings.
On May 31, the China Association of Automobile Manufacturers issued a statement bluntly criticising a leading automaker for launching aggressive price cuts that triggered a chain reaction across the industry, sparking fears of a renewed price war. On the same day, a senior official from the Ministry of Industry and Information Technology said the government would strengthen oversight of excessive internal competition in the auto sector, stressing that a disorderly price war benefits no one and leads nowhere.
The latest round of the price war broke out in late May, with several leading Chinese new energy vehicle manufacturers—each with annual sales exceeding one million units—announcing promotional discounts on certain models. Although the disorderly and involutionary price war has been curbed, various forms of price competition that exist in the automotive sector remain a key factor accelerating industry differentiation.
