China Economy Impacted as Price War Affects China Manufacturing and Automotive Sector

Tuesday, 24 September 2024, 08:03

China's economy is under pressure as a fierce price war hits China manufacturing and consumption, particularly in the automotive sector. With car dealers struggling, the future of Chinese carmakers remains uncertain as electric vehicles (EVs) face declining prices both domestically and in international markets. The implications for the economy and dealers are significant, calling for urgent governmental support.
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China Economy Impacted as Price War Affects China Manufacturing and Automotive Sector

China's Automotive Industry in Turmoil

As China's economy grapples with challenges, a price war in the automotive sector has led to sharp declines in vehicle prices. Chinese car dealers are appealing for government intervention amid mounting losses.

Declining Prices in EV Exports

Recent customs data reveal that China manufacturing is facing severe competition, with Chinese carmakers lowering prices abroad. The export value of EVs has risen, but prices have diminished.

  • Export prices for Chinese EVs fell by 10.56% last month.
  • Domestic dealers have incurred US$19.55 billion in losses.

Financial Pressures on Dealers

According to the China Automobile Dealers Association (CADA), dealers are experiencing cash flow difficulties and increased risks of financial instability.

  1. The average discount rate for new automobile sales is hovering around 17.4%.
  2. Demand is weak, exacerbating inventory backlog issues.

Government Intervention Needed

The CADA has called on Beijing to institute relief measures to support struggling dealers and provide enhanced loan facilities.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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