Car sales in China delayed in a government campaign to stop the price war

China’s promise to end the fierce price war in the car sector began to pay fruits, with the number of models covered by discounts during the past month, although this step negatively affected the scope of sales. The Passenger Motors Association said in a statement on Friday that the number of models that saw discounts in July reached 17 compared to 23 models in the same month last year, which is a similar number for the July 2023 level. Sales landing monthly and annually grows at a slower rate, retail sales in July to 1.8 million units, a 12% reduction. According to the Passenger Cars Association, sales grew 6.3%, but this delayed compared to the monthly rate, which approached 15% during the period between March and June. Summer is usually considered a relatively tranquil period to buy cars. “Anti competition competition is a huge profit for the sector,” the secretary general of the association, Koy Dongcho, said at a press conference. He added that this step will contribute to improving the entire supply chain, especially companies that work in the beginning stages of production, that “will be able to focus on improving quality improvement and meeting the customer needs instead of competing based on price reduction.” China has strengthened its control over the car sector in light of the fear that the continuous price war, which has exhausted the industry, is no longer to continue, warning that it is pushing the worst companies to bankruptcy. Authorities called a decisive meeting with the manufacturers of electric cars and the heads of senior electric car manufacturers, including BYD, in early June to Beijing, where they were asked to organize themselves (companies recommended self -organization of the market without direct intervention by the authorities) and they should not deliver them unjustified discounts. The authorities also emphasize the restrictions on the commissions that the agents obtained when clients registered to obtain car lending from partner banks, a practice that contributed to the increase in price war, as agents often used part of these commissions to finance additional discounts. The association indicated that this change also contributed to the slowdown of sales during July. Koi confirmed that car sales will achieve growth in 2025, despite the reduction of manufacturers for discounts and promotional offers. It is likely that the reduction of the tax exemption to buy cars from 10% to 5% early next year motivates consumers to accelerate the purchase before the decision is valid.