[Source/Observer Network, Pan Yuzhao; Editor/Gao Shen] According to the South China Morning Post, data from JPMorgan Chase shows that in April 2025, the average discount rate of Chinese auto manufacturers reached a record high of 16.8%, an increase of 0.5 percentage points compared to March, and more than doubled the average discount rate for all of 2024.

In response, JPMorgan Chase believes that under the price war, the financial situation of Chinese automakers this year is even more worrying, especially given that most new energy vehicle companies have yet to turn a profit.

Chinese Automotive Industrial Production Line, South China Morning Post

"Price reflects supply and demand equilibrium." Lai Yizhe, head of automotive research at JPMorgan Chase's Asia-Pacific region, said that the price war in China's market this year has become more intense, but the demand for electric vehicles has not surged. Due to increasingly fierce price wars, smaller automakers will either be forced out of the market or acquired by larger competitors within the next two years.

However, JPMorgan Chase also believes that due to higher profits overseas, the strong export performance of Chinese automakers in recent years will help support their profitability. In the first four months of this year, new energy vehicles accounted for one-third of total Chinese automobile exports.

Decrease in the Number of Discounted Models

Regarding JPMorgan Chase's view, Cui Dongshu, secretary-general of the Joint Division of Passenger Car Market Information of the China Automobile Circulation Association, told the Observer Network that its statistical method was problematic and not entirely accurate.

According to data disclosed by the Joint Division of Passenger Car Market Information in early May, from January to April this year, the average discount strength of newly discounted new energy vehicles was 27,000 yuan with a decrease of 13.3%; the average discount strength of newly discounted fuel vehicles was 18,000 yuan with a decrease of 9.5%; the overall average discount strength of the passenger car market was 25,000 yuan with a decrease of 12.3%.

In particular, in April alone, the average discount strength of newly discounted new energy vehicles was 36,000 yuan with a decrease of 18%; the average discount strength of fuel vehicles was 16,000 yuan with a decrease of 6.8%; the overall average discount strength of the passenger car market was 32,000 yuan with a decrease of 15.2%.

In terms of the number of discounted models, only 7 models were discounted in January; 21 and 23 models respectively in February and March, both fewer than the same period last year; while in April, only 14 models were discounted, a significant decrease compared to 41 in April last year and 19 in the same period in 2023, reflecting the clear cooling trend of the discount wave.

Monthly Distribution of Discounted Models in Previous Years, Cui Dongshu

In detail, from January to April this year, 16 fuel vehicles were discounted, a decrease of 13 compared to the same period; 3 hybrid vehicles were discounted, a decrease of 3 compared to the same period; 13 plug-in hybrid vehicles were discounted, a decrease of 11 compared to the same period; 5 extended-range vehicles were discounted, a decrease of 5 compared to the same period; 28 pure electric vehicles were discounted, a decrease of 24 compared to the same period.

Cui Dongshu stated that as the promotional subsidies for national scrappage and renewal efforts are strengthened, market recovery is evident, and the effect on the car market is very obvious, which will relatively alleviate the pressure of the price war, enabling the spring car market to enter a sustained strengthening state.

Ongoing Rectification of "Intracompetitive" Competition

On the other hand, over the past year, the Central Committee of the Communist Party of China and the State Council have repeatedly issued instructions to comprehensively rectify "intracompetitive" malignant competition. In July 2024, the Political Bureau of the Central Committee of the Communist Party of China first proposed "preventing 'intracompetitive' malignant competition"; at the Central Economic Work Conference in December 2024, it further clarified "comprehensively rectifying 'intracompetitive' competition," standardizing the behavior of local governments and enterprises; the government work report in 2025 also first proposed "comprehensively rectifying 'intracompetitive' competition."

In February this year, the State Administration for Market Regulation held a symposium with seven enterprise representatives, including BAIC Group and Mercedes-Benz Group, to engage in in-depth exchanges around the rectification of "intracompetitive" competition, soliciting opinions and suggestions.

At the press conference held by the State Council Information Office on May 20, Li Chao, spokesperson for the National Development and Reform Commission, stated that some enterprises are caught up in "intracompetitive" competition, engaging in aggressive price wars, counterfeiting, and selling inferior goods, severely distorting market mechanisms and disrupting fair competitive order, which must be rectified.

Li Chao stated that China will rectify "intracompetitive" competition through accelerating industrial transformation and upgrading, and intensifying the removal of regional protectionism and market segmentation. Specific measures include: adhering to innovation leadership to accelerate industrial transformation and upgrading; strengthening local constraints to intensify the removal of regional protectionism and market segmentation; optimizing industrial layout to curb disorderly expansion of backward production capacity; strengthening market supervision to purify the market competition environment. Among these, the NDRC will crack down hard on market chaos such as inferior low prices, and legally investigate and deal with unfair competition and price violations.

This article is an exclusive contribution of the Observer Network and cannot be reprinted without permission.

Original source: https://www.toutiao.com/article/7506455697451614758/

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