China authorities warned the industry about too low prices for cars

The Ministry of Industry and Trade of China, together with the economic planning agency, gathered a meeting with electric vehicles. The authorities are concerned about the protracted “price wars” and warned the industry about too low prices for cars. At the highest level, they are not interested in excessive competition of Chinese brands in the domestic market, but there is no counteraction yet.

The CNBC portal claims that the term “involution” has entered the use in the meaning of the “bottom race”. This word sounded in the annual report of the Chinese Prime Minister Lee Qian in March: even then, at the highest level, a call for the refusal of “involutional competition” was at the highest level. However, at the end of May, Byd provoked a new round of “price wars”, and Beijing intervened.

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The organizations associated with the government criticize BYD, but the Chinese authorities do not have real levers: the most severe competition in the market is a consequence of an oversupply of supply and falling prices for cars exported from China. The official newspaper of the Communist Party of China directly writes that “there are no winners in price wars,” and the Ministry of Industry and Trade is ready to strengthen the regulation in the market for “conscientious competition”.

Although the Chinese authorities began to alarm, analysts believe that taking into account production capacities and excess supply, the most intense phase of competition is still ahead. Analyst of the Association of Auto -DISHERS of China Zhong Shi believes that little with market competition can be done. The phenomenon of “used” machines with zero mileage has already appeared on the domestic market, and without regulation, the industry is waiting for chaos, believes Great Wall Boss Wei Jianzyun.

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