AutoBeta(AutoBeta.net)07/08 Report--

On July 8, the China Association of Automobile Manufacturers issued a statement. According to the statement, in the "commitment of the Automobile Industry to maintain a Fair Market order" signed by 16 automobile production enterprises, "not disturbing the fair competition order of the market at abnormal prices" involves the expression of "price", which is improper and violates the spirit of the Anti-Monopoly Law. The above provisions are now deleted from the commitment, and 16 and other automobile production member enterprises are urged. Strictly abide by the Anti-monopoly Law and relevant administrative regulations, guidelines and rules, set prices independently and compete fairly, and jointly contribute to the development of industrial norms and healthy innovation.

On July 6th, the China Association of Automobile Manufacturers, together with representatives of FAW, Dongfeng, SAIC, Changan, BAIC, Guangzhou Automobile, Sinotruk, Chery, Jianghuai, Geely, Great Wall, BYD, NIO, ideal, Xiaopeng and Tesla, jointly signed the letter of commitment for the maintenance of Fair Competition Market order in the Automobile Industry (hereinafter referred to as the "commitment letter").

The main contents of the letter of commitment cover four aspects, including: first, adhere to the rules and regulations of the industry, standardize marketing activities, maintain the order of fair competition, and do not disrupt the order of fair competition at abnormal prices; second, pay attention to the ways and means of marketing propaganda, do not exaggerate propaganda, do not false propaganda, and do not mislead consumers in order to attract attention and increase customers. Third, carry forward the craftsman spirit of quality first and quality-oriented, meet the needs of the people for a better life with high-quality products and high-quality service; fourth, carry forward socialist core values and actively fulfill social responsibility, actively shoulder the heavy burden in terms of steady growth, strong confidence and risk prevention, and join hands to make important contributions to national economic growth.

In this "letter of commitment", "not disturbing the fair competition order of the market at abnormal prices" has become the focus of the industry's attention. In other words, people in the industry also regard it as a promise of "no price reduction" without a price war or a public opinion war. Judging from the list of car companies that signed the agreement, there are both traditional automakers and new car makers, but the signing quickly raised questions online. There are doubts that the move violates the relevant provisions of the Anti-monopoly Law. It is understood that articles 13 and 16 of the Anti-monopoly Law (2008) prohibit competitive operators from reaching monopoly agreements to fix or change commodity prices; trade associations may not organize operators of their own industries to engage in prohibited monopoly acts. According to the industry point of view, in the price content mentioned in the first article of this "commitment", the association of automobile companies is suspected of reaching a monopoly agreement, while the expression of "abnormal price" is suspected of reaching a price agreement or restricting or fixing a price.

It should be noted that signing the "letter of commitment" does not guarantee price stability, vehicle manufacturers and dealers will still adjust prices according to changes in market factors. On the same day, North and South Volkswagen respectively spoke to its ID. The price of brand models will be adjusted to a maximum of 87000 yuan. Among them, FAW-Volkswagen announced from July 6 ID. Family models start at 155900 yuan, and SAIC-Volkswagen also announced a maximum price reduction of 37000 yuan for its ID.3 models, starting from 125900 yuan from now until July 31, 2023, with a limited edition of 7000 units.

In fact, since 2023, "price war" has been the key word of the automobile industry. Since the beginning of the year, the automobile market has set off an unprecedented "price war", and it has become more and more intense. In January, the prices of Tesla's two domestic cars were cut to an all-time low, followed by a number of new energy car companies. In March this year, Hubei Province launched the strongest car purchase subsidy policy in history, and the "price war" further spread to the field of fuel vehicles, among which the maximum subsidy of 90,000 yuan for Dongfeng Citroen C6 has become a hot topic in the industry.

According to incomplete statistics, up to now, more than 40 car brands and hundreds of models in China have participated in the price war by means of factory subsidies or price cuts by dealers, with a discount range of 30, 000-100000 yuan.

At the same time, the price of new cars has fallen seriously. For example, BYD has reduced the price of volume models by launching champion models, including Qin champion version and Song champion version, while the prices of Owl Dragon / Owl Dragon MAX models launched by the Harvard brand have also dropped to 139800 yuan and 159800 yuan. In terms of joint venture brands, such as the launch of the new Hanlanda car, which has always needed a price increase, it has also dropped by 20,000 yuan, which can be called the "hardest" new product in history. The China Automobile Circulation Association believes that the serious decline in new car prices, the low gross profit of naked cars, and the lack of demand is still the main contradiction in the current automobile market.

Despite the momentum of the "price war", the long "price war" failed to significantly boost sales. According to the latest data released by the China Automobile Association on July 5, domestic car sales are expected to reach 2.5058 million in June 2023, up 5.22% from the previous month and 0.14% from the same period last year. Cumulative car sales in the first half of 2023 are expected to reach 13.1227 million, an increase of 8.84% over the same period last year. According to the data, although sales increased in the first half of the year compared with the same period last year, the sales in the first half of this year were not significant considering the impact of last year's epidemic.

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