Global Courant 2023-04-18 05:48:10
BEIJING – A deadly price war has broken out on the largest car market in the world.
Within a week in March, Volkswagen’s Chinese joint venture slashed the prices of its ID.3 electric cars by 18 percent.
Changan Automobile, one of China’s state-owned automakers, offered US$3,000 (S$4,000) cash rebates, free charging stations and other incentives for its electric vehicles.
BYD, the country’s largest electric car maker, has announced a second round of price cuts for some of its older models in a month.
In the midst of declining car sales, car brands are going to great lengths to stay competitive, offering giveaways and deep discounts.
More than 40 automakers have discounted electric and gasoline cars in China this year. The discounts amounted to several hundred dollars for cheaper models and tens of thousands of dollars for more expensive offerings.
“The severity of this cycle of price cuts is something I’ve never seen before,” said Mr Tu Le, general manager of Beijing consulting firm Sino Auto Insights, who has 25 years in the auto industry in China and the United States. worked. year.
Price competition has disrupted what has been a pillar of strength in recent years, even as strict anti-pandemic measures shook the Chinese economy and undermined efforts by the ruling Chinese Communist Party to build confidence.
According to the China Passenger Car Association, car sales in China fell 13 percent in the first three months of 2023. Traditional car sales plummeted, while electric vehicle growth slowed.
The Chinese electric car market has grown rapidly since 2020 – doubling sales last year – partly supported by government subsidies.
When that program expired in December after 13 years, competition intensified to attract buyers in an already crowded segment of the market.
At the same time, traditional automakers are struggling to clear inventory of older cars before stricter national emissions standards from July make it difficult to sell diesel and gasoline vehicles.
An already nervous market started turning in January when Tesla, the US company that makes electric vehicles based in Shanghai, cut prices in China for the second time in three months. Other manufacturers felt the pressure to do the same.
This month, Mr. Wang Chuanfu, chairman and general manager of BYD, suggested that the government extend tax exemptions that reduce the cost of buying electric vehicles until 2025, rather than allowing them to expire this year.
