Translation. Region: Russian Federal
Source: People’s Republic of China in Russian – People’s Republic of China in Russian –
Source: People’s Republic of China – State Council News
BEIJING, May 31 (Xinhua) — The China Association of Automobile Manufacturers (CAA) has launched an industry-wide initiative calling on automakers to avoid disorderly competition in the country’s booming new energy vehicle (NEV) market.
The KAA statement stressed that despite the rapid growth of China’s NEV industry, which accounts for more than 40 percent of new vehicle sales in the country, the industry has seen a decline in profitability in recent years, largely due to increased “involutionary-style” competition accompanied by chaotic price wars.
Continuously increasing investment is needed to ensure after-sales service and innovative development of enterprises, and disorderly price wars seriously affect the normal business operations of enterprises, threaten the stability of industrial chains and supply chains, and drag the sector into a vicious circle, the KAA said.
The KAA noted that the recent significant price cuts initiated by one of the major automakers on May 23, which were subsequently followed by others, caused panic in the market.
The association warned that such price wars would further reduce the profitability of enterprises, thereby affecting the quality of products and after-sales services. This would not only hinder the healthy development of the industry itself, but also harm the rights and interests of consumers and create a hidden security threat.
All enterprises must strictly adhere to the principles of fair competition, while advantaged enterprises should not seek to displace other players in order to gain a monopoly, the initiative notes.
In addition to legitimate price adjustment measures, businesses should not sell their products at prices below cost, engage in deceptive marketing practices, or distort market order in ways that harm the fundamental interests of the industry and consumers, the CAA said.
All enterprises are also encouraged to conduct self-inspection and correct any identified problems in accordance with the relevant laws and regulations of the country. -0-