Chinese carmakers have refrained from offering steep discounts to align with Beijing’s efforts to protect a vital industry, but an end to the prolonged price war remains elusive, as the sector grapples with overcapacity and weak consumer demand for high-ticket items.
“This is encouraging, as intense competition – especially after the Shanghai Auto Show in April – sent industry-wide discounts to a record high of over 17 per cent in May, June and early July, the highest since we started tracking pricing trends in China in 2017,” said Nick Lai, head of auto research in Asia-Pacific at JPMorgan.
“However, the root cause of the challenging price environment is overcapacity. We may need to be patient to see a sustainable [and] better price environment in the long term.”
JPMorgan’s data covered 40 foreign and Chinese car brands across 1,000 variants, including imports.
In late May, the Chinese government intervened in the automotive market over concerns that fierce price competition could jeopardise the EV sector, where mainland companies lead globally, according to analysts.
