Core Viewpoint - The automotive industry is experiencing a significant price war, leading to widespread discounts across various brands, which is impacting profitability and market dynamics [2][5][6]. Group 1: Price War and Discounts - Over 70 models from brands like BYD, Geely, and Chery have initiated price cuts within a week, indicating a competitive pricing strategy [2][5]. - BYD's Seagull Smart Driving version is now priced at 55,800 yuan, a reduction of 14,000 yuan from the official price, while Cadillac's XT4 has seen a discount exceeding 80,000 yuan [5]. - The China Automobile Industry Association (CAAM) has noted that the ongoing price war is a significant factor in the declining profitability of the industry, with a call for fair competition [6][9]. Group 2: Sales Performance and Market Trends - During the Dragon Boat Festival, the auto show achieved a transaction amount exceeding 4 billion yuan, an increase of 8.1% compared to the previous year [6]. - BYD maintained its position as the top seller in May with 382,500 units sold, a year-on-year increase of 15.3% [6][11]. - The overall market for new cars has seen average price reductions of 25,000 yuan, with a notable focus on electric vehicles [9][10]. Group 3: Inventory and Supply Chain Challenges - The automotive industry is facing increasing inventory pressures, with a reported 3.5 million vehicles in stock as of April 2025, marking a 150,000 unit increase from the previous month [10]. - Dealers are experiencing financial strain due to slow sales and high inventory levels, with only 35% of 4S stores meeting their sales targets in the first half of the year [14]. - The supply chain is also under pressure, with profit margins for suppliers dropping to around 10%, and payment terms extending up to 120 days [16]. Group 4: Future Outlook and Strategic Responses - Companies are expected to continue aggressive pricing strategies to clear old inventory and make room for new models, as seen with BYD and other brands [10][11]. - The industry is urged to adopt healthier supply chain management practices, focusing on long-term partnerships and cost reduction through innovation [16][18].