BYD makes its hybrid models less expensive than its petrol counterparts in a strong second offensive against them.
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BYD will launch new variants of the Qin Plus and Chaser 05 in Glory Editions on February 20, both starting at RMB 79,800, or $11,100, according to local media.
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Xpeng believes that expanding volumes is critical, and will continue to prioritize volumes into 2024, as well as improving profitability through cost reductions.
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Model Y Long Range AWD price in China is now 304,400 yuan (42,930 USD).
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The statement in the pledge, "not to disrupt the fair competition order of the market with abnormal prices," was inappropriate and inconsistent with the principles of China's anti-monopoly law, the CAAM said.
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SAIC-Volkswagen is offering discounts of up to RMB 42,000 for the ID.3, while FAW-Volkswagen's ID.6 CROZZ is priced at RMB 63,000 less than its website shows.
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Auto industry players should not disrupt fair competition with abnormal prices and should avoid cutting prices in a reckless manner, a MIIT official said.
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Price wars are clearly not what China's main industry regulator wants to see.
An official from China's Ministry of Industry and Information Technology (MIIT) said at the 2023 China Auto Forum in Shanghai on July 6 that participants in the country's auto industry should not compete with abnormal prices, according to a report on state broadcaster CCTV today.
So far this year, the Chinese auto industry has seen the largest wave of price cuts in its history, including more than 100 models from more than 30 brands, some at any cost, the report noted.
In response to the phenomenon, the MIIT source said that the development of China's auto industry has entered a new phase, with new energy vehicles (NEVs) forming a certain lead and auto companies should regulate their marketing activities, the report said.
Auto industry players should not disrupt fair competition with abnormal prices and should avoid reckless price cuts, while strengthening technological innovation and improving product quality, the MIIT official Miao Changxing was quoted as saying in the report.
Yesterday, the China Association of Automobile Manufacturers (CAAM) and 16 major automakers jointly signed a pledge to maintain fair market order in the auto industry.
The 16 car companies include BYD, Nio, Li Auto, Xpeng, Tesla, SAIC, Geely and Great Wall Motor, who pledged to maintain a fair competition order and not to disrupt the order in the market with abnormal prices.
The initiative is just the beginning, and further restraint on bad behavior, including malicious price cuts, will depend on self-regulation and regulatory means, Fu Bingfeng, executive vice-president and secretary general of the CAAM, was quoted by CCTV in the report today.
Separately, Xu Changming, vice director of the National Information Center, said yesterday at the 2023 China Auto Forum that Tesla's average profit per vehicle is high enough that it has ammunition if it wants to fight price wars.
Tesla has previously cut its price in China by RMB 30,000 yuan ($4,140), and its average profit per vehicle is $10,426, leaving room for a 40,000 yuan price cut if the price war continues, Xu said, according to a video circulating on social media.
The calculation is based only on Tesla's 1.31 million global deliveries last year, and if it reaches its 1.8 million delivery target this year, then costs are expected to fall further, Xu noted.
Tesla's average profit per vehicle is 8.5 times that of BYD, whose figure last year was RMB 8,854 yuan per vehicle, according to Xu.
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Premium EV market in China poses significant challenges even for Tesla
The post Tesla slashes prices of premium models by 45,000 yuan (6,204 USD) in China appeared first on CarNewsChina.com.
Discounts on passenger cars in China continued to expand in April, but the industry is seeing some positive changes heading into May.
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The price wars that erupted in the Chinese auto industry in March carried over into April. However, analysts see fewer car discounts heading into May.
Discounts on passenger cars in China continued to expand in April, but the industry saw some positive changes heading into May, with price competition, especially for fuel vehicles, expected to ease, said CITIC Securities analyst Zhang Ruohai's team in a research note today.
These changes include the fact that some automakers are no longer offering increased discounts to dealers, and have even scaled back compared to the first quarter, according to the team.
With China allowing some fuel models based on existing emission standards to extend their sales period by six months until the end of this year, there is much less urgency for these models to clear inventory in the short term, the team noted.
In addition, inventory levels in the Chinese auto industry fell in April, with dealer inventory levels returning to a relatively balanced position, the team said.
From January to April, discounts offered by the Chinese auto industry were generally increasing, with actual selling price to manufacturer guide price ratios of 91.3 percent, 92.4 percent, 90.8 percent and 90.2 percent, respectively, according to an indicator compiled by the team.
This means that in addition to the price pickup in February, discounts expanded in March and April, the team said, adding that the indicator was 88.1 percent and 87.3 percent for fuel cars and 96.84 percent and 96.78 percent for new energy vehicles (NEVs) in the past two months, respectively.
Against the backdrop of overall weak consumer demand for cars, the price wars had a boost to sales of some models, but depressed total sales as consumer wait-and-see sentiment increased, according to the team.
In March, when the price war was at its most intense, Chinese passenger car retail sales were 1.587 million units, up 0.3 percent year-on-year and up 14.3 percent from February, according to the China Passenger Car Association (CPCA).
In April, China's passenger car retail sales were 1.63 million units, up 55.5 percent year-on-year and up 2.5 percent from March.
From May 1 to 14, China's passenger car retail sales were 706,000 units, up 55 percent year-on-year and up 24 percent from the same period last month, according to data released yesterday by the CPCA.
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Price war has been the most talked about topic in China's auto industry this month, and the imminent implementation of a new emissions standard is seen as a major factor.
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The imminent implementation of a new emissions standard in three months is seen as a major factor behind the price war launched by internal combustion engine (ICE) automakers this month. Now, these automakers may be able to get some respite.
China's policy on extending the sales period for vehicles built to the 6a emissions standard may be announced soon, National Business Daily reported today, citing Shen Jinjun, president of the China Auto Dealers Association (CADA), as saying at a forum.
A government document on the switch to the China 6b standard and the extension of the sales period for 6a-compliant models will be released soon, Shen said, without revealing any more information.
China released the final rule for stage 6 light vehicle emission limits and measurement methods (China 6 standard) in December 2016, a new standard that combines best practices from European and US regulatory requirements.
The standard is being implemented in two phases, with the 6a standard already taking effect on July 1, 2020, and the 6b standard coming into effect on July 1, 2023.
During this month, price war has been the most talked about topic in the Chinese auto industry, and the upcoming entry into force of the 6b standard is seen as an important factor.
There are still some older models on the market that do not meet China 6b emissions regulations, and the de-stocking of these models could have an impact on production, sales and prices in the auto industry, a team from CITIC Securities said in a March 13 research note.
In early March, authorities in Hubei province joined forces with many local car companies to offer subsidies to consumers for car purchases, with some models being subsidized by as much as 90,000 yuan ($13,060). This was seen as the beginning of the massive outbreak of the price war.
Subsequently, several brands, including Volkswagen and BMW, announced similar large discounts. At the same time, some car companies made it clear that they would not participate in the price war, trying to dispel the wait-and-see sentiment of potential consumers.
The price war has had an unprecedented impact on China's auto industry, and on March 22, the China Association of Automobile Manufacturers (CAAM) called on all parties to return to rationality and bring order to the market.
On March 23, China's Auto Dealers Chamber of Commerce (CADCC) called on regulators to delay the implementation of the China 6b emissions standard.
Since the beginning of the year, the CADCC has received feedback from many auto dealer groups that they are under significant pressure to survive because of the impending full implementation of the China 6b emissions standard.
A study covering nearly 100 auto dealer groups showed that nearly 98.89 percent of them strongly recommended that China delay the implementation of the China 6b emissions standard until January 1, 2024, according to the CADCC.
These dealer groups suggest that regulators allow sufficient switchover time for car companies and dealers to deal with the existing inventory of vehicles that do not meet the China 6b emissions standard.
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China's transition to new emission standard: How will this affect auto market?
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