China's Price War and E-Commerce Surge Lead to Huge Losses for Car Dealers
China's Car Dealers Grapple with Price Wars
Car dealers in China are experiencing significant challenges as a price war continues to escalate in the EV market. According to the China Automobile Dealers Association (CADA), over 30,000 car dealers are staring into a grim future in 2025.
Effects of the Price War
- Price cuts have caused steep industry losses, reaching 177.6 billion yuan (approximately US$24.3 billion).
- Approximately 27% of dealers reported that they achieved less than 70% of their sales targets for 2024.
- 10% of dealers, around 4,000, have shut down due to overwhelming financial pressures.
Market Trends and EV Adoption
The surge in e-commerce for car sales and the rise in EV adoption have transformed the market landscape. With Chinese manufacturers discounting prices on numerous models, many dealers are selling below cost.
- Average discount on pure electric cars saw a reduction of 10%.
- Hybrid vehicles reflected 4.3% discounts.
With threats looming over profitability, businesses are advised to assess market demand critically. Experts predict that many dealers will likely exit as more EV manufacturers shift to direct sales strategies, further impacting the traditional dealership model.
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.