Nan Fang Du Shi Bao·2025-06-04 14:46Core Viewpoint - The automotive industry in China is experiencing a resurgence of price wars, driven by competitive pressures among manufacturers, particularly in the electric vehicle sector, leading to concerns about the sustainability of business practices and product quality [1][2][4]. Group 1: Sales Performance - BYD continues to lead the market with May sales of 382,500 units, a year-on-year increase of 15.3% [1] - SAIC Group follows closely with sales of 366,000 units in May, up 10.2% year-on-year [1] - Geely's sales surged to 235,200 units in May, marking a significant year-on-year growth of 46% [1] - New energy vehicle companies like Leap Motor and AITO also reported substantial growth, with Leap Motor delivering 45,100 units, a 148% increase year-on-year [1] Group 2: Price War Dynamics - BYD initiated a promotional campaign in May, offering discounts of up to 53,000 yuan on 22 models, aiming to boost sales towards its 2025 target of 5.5 million units [2] - Following BYD's lead, Geely and Chery also announced significant price cuts, with Geely's models seeing reductions to as low as 59,800 yuan and Chery offering discounts of around 40% on certain models [2] - The price war has extended to joint ventures and luxury brands, with notable price reductions from Toyota and Cadillac, indicating a broader market trend [2] Group 3: Industry Response and Concerns - The China Automotive Industry Association issued an initiative to maintain fair competition, warning against the negative impacts of chaotic price wars on profit margins and product quality [1][2] - Industry leaders, including Great Wall Motors and Xiaopeng Motors, expressed concerns about "involutionary" competition, calling for a return to innovation and quality-focused strategies [3][4] - The market is entering a phase of stock competition, with projected sales growth slowing to 4.5% in 2024, indicating a shift in market dynamics [4] Group 4: Implications of Involutionary Competition - The ongoing price wars are seen as a symptom of deeper issues, including insufficient innovation and a lack of effective management in the industry [4][5] - Continuous price reductions have led to a decline in procurement prices for components by 10%-15% annually, which may compromise quality and service reliability [5] - The automotive industry is at a critical juncture, facing challenges in maintaining operational sustainability and brand integrity due to the pressures of price competition [5][6] Group 5: Recommendations for Industry Improvement - Experts suggest that addressing "involutionary" competition requires a combination of government intervention and market regulation to ensure fair practices [6] - Recommendations include stricter penalties for violations, improved oversight of payment practices to suppliers, and the establishment of self-regulatory mechanisms within the industry [6] - Emphasis is placed on enhancing quality control across the supply chain and fostering a culture of innovation to break the cycle of price competition [6]