China auto manufacturer warns of chaotic price wars

The China Association of Automobile Manufacturers (CAAM) issued an initiative on Saturday, urging industry players to avoid chaotic price wars and uphold fair competition.

The statement highlighted that declining profitability in the industry has been exacerbated by "cutthroat competition," particularly through disorderly price-cutting moves, which have significantly eroded corporate earnings.

It specifically warned against the ripple effects of aggressive discounting initiated by certain automakers, stressing that such practices not only disrupt normal business operations but could also trigger systemic risks across the supply chain and ultimately harm consumers' long-term interests.

Echoing the CAAM's appeal, an official from the Ministry of Industry and Information Technology (MIIT) pledged intensified efforts to curb cutthroat competition and safeguard a fair, orderly market environment to protect consumer rights.

The MIIT emphasized that reckless price wars, a hallmark of such harmful competition, undermine product quality, service standards and consumer welfare while jeopardizing the sector's sustainable development.

"There are no winners in price wars, nor do they permit a viable future," the official noted.

Instead, the ministry urged automakers to focus on technological and managerial innovation to reduce costs, enhance product quality and services, fulfill social responsibilities, and cultivate strong brand reputations, which are key drivers for high-quality development in the automotive industry.