Feng Huang Wang·2025-05-28 03:08Core Insights - BYD has announced price cuts, indicating a potential critical point in the Chinese automotive market, where weaker manufacturers may struggle to survive amid ongoing price declines [1][2] - The automotive industry is experiencing a price war that has lasted approximately three years, leading to significant profit erosion for companies and suppliers [3] Industry Dynamics - The price war is reminiscent of the early 20th-century U.S. automotive industry, where over 100 companies competed until consolidation occurred [2] - More than half of the 169 automotive manufacturers operating in China hold less than 0.1% market share, highlighting the intense competition [2] - Long-term price pressures are threatening the stability of the automotive supply chain, with some suppliers facing bankruptcy risks due to continuous price reductions by manufacturers [3] Market Predictions - The current situation may lead to a "bloodbath" in the industry, potentially marking the beginning of a series of failures among weaker players like Nezha Auto and Polestar [2] - Despite predictions of market consolidation, the overall market size continues to grow, with new entrants like Xiaomi and Huawei expected to emerge even as weaker companies exit [3]