The automotive industry in China has seen a significant increase in price reductions for vehicle models in the first nine months of the year. According to Cui Dongshu, the secretary-general of the China Passenger Car Association (CPCA), a total of 195 vehicle models experienced price cuts during this period. This number surpasses the 150 models that saw price reductions in 2023 and the 95 models in 2022.
One of the most notable areas where price reductions have occurred is in new energy vehicles (NEVs). Plug-in hybrid vehicles and pure electric vehicles have seen price reductions of more than 13%. Specifically, the breakdown of price reductions for different types of vehicles is as follows:
– 71 gasoline-powered models with an average price reduction of 15,000 yuan (2,140 USD) and an average reduction of 9.3%
– 13 hybrid models with an average price reduction of 15,000 yuan and an average reduction of 8.4%
– 29 plug-in hybrid models with an average price reduction of 24,000 yuan (3,420 USD) and an average reduction of 13.7%
– 13 range-extender models with an average price reduction of 14,000 yuan (2,000 USD) and an average reduction of 7.6%
– 69 pure electric models with an average price reduction of 23,000 yuan (3,280 USD) and an average reduction of 13.5%
While the price reductions for range-extender and hybrid models have been more moderate, conventional gasoline-powered vehicles have also been affected by the price cuts of imported gasoline-powered vehicles. Additionally, some mid-to-high-end gasoline-powered vehicles have started to see significant price reductions due to the price cuts of NEVs.
Price reduction is a key strategy to stimulate car sales, but it can also have consequences. Some automakers may be selling cars at a loss despite an increase in sales. Li Shufu, the chairman of Geely, has warned about the potential risks of a price war leading to cutting corners, counterfeiting, and selling fake products.
The automotive industry in China continues to see changes in pricing strategies, with various types of vehicles experiencing price reductions. It will be interesting to see how these price cuts impact sales and the overall market in the coming months.
