"China moved on Thursday to curb a fierce price war among automakers that has caused massive losses for the industry, after passenger car sales dropped nearly 20% in January from the year before, the fastest pace in almost two years. The State Administration for Market Regulation released guidelines for manufacturers, dealers, and parts suppliers aimed at preventing a race-to-the-bottom price war."
"Passenger car sales in China fell 19.5% in January from a year earlier, according to the China Association of Automobile Manufacturers. That was the biggest percentage drop since February 2024. The 1.4 million passenger cars sold in January compared with 2.2 million units sold in December, CAAM said. Weakening demand reflects a reluctance of cash-strapped buyers to splash out on big purchases."
China's State Administration for Market Regulation issued guidelines for automakers, dealers, and parts suppliers to prevent a race-to-the-bottom price war. The rules ban setting prices below production cost to squeeze out rivals or monopolize the market and warn of significant legal risks for violators. The guidelines also prohibit deceptive pricing strategies and price fixing between parts suppliers and manufacturers. Passenger car sales fell 19.5% in January year-on-year, the largest drop since February 2024, with 1.4 million units sold versus 2.2 million in December. Weak consumer demand, reduced EV tax exemptions and uncertain trade-in subsidies weighed on sales.
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