Latest news with #ChinaAutomobileDealersAssociation
Reuters
6 days ago
- Automotive
- Reuters
China plans to ban new cars from being resold within six months after registration
SHANGHAI, July 19 (Reuters) - China's industry ministry is planning to ban the resale of new cars within six months after their registration, an industry association publication said on Saturday, in an attempt to address sales of zero-mileage used cars. Auto Review, a publication run by the China Association of Automobile Manufacturers, reported the move in an editorial published on its WeChat account. It said that the China Automobile Dealers Association, another industry group, had separately proposed a code system for exports of used cars. The editorial added that Chery and BYD ( opens new tab, , were among the companies that were planning to hold dealers accountable for violations, including licensing cars before they are sold.
Forbes
02-07-2025
- Business
- Forbes
China Market Update: China To Address Auto Overcapacity & E-Commerce Competition
CLN Asian equities were largely higher overnight, led by Thailand, Pakistan, and Taiwan, while Japan underperformed and Hong Kong was closed for the Hong Kong Special Administrative Region (SAR) Establishment Day, which marks the handover of the territory to China by the UK following 156 years of colonial rule. Mainland China opened lower, but grinded higher on good volumes and mixed breadth. President Xi headed the Central Committee for Financial and Economic Affairs' sixth meeting, which was focused on several economic areas. The release states the government should 'govern the low-price and disorderly competition of enterprises in accordance with laws and regulations' and 'promote the orderly exit of backward production capacity'. This is aligned with recent government regulators' talk on addressing overcapacity in the auto industry. Coincidentally, the China Automobile Dealers Association's investor warning index increased +3.9% to 56.6%. Levels above 50 indicate auto dealers are holding high levels of inventory, which exposes them to liquidity risk. The statement may also be referencing the recent increase in E-Commerce competition. entered restaurant delivery and online travel by slashing prices and losing money in order to garner market share. While execution and implementation of this guidance will be important, it should be cheered by investors as it would raise profit margins. It would also address President Trump's and the EU's concerns on excess auto production. The release also referenced growing the marine industry, including offshore wind power, as electricity companies outperformed. Mainland healthcare stocks outperformed after the National Healthcare Security Administration and National Health Commission released "Several Measures to Support the High-Quality Development of Innovative Drugs". Real estate was off, as the China Index Academy announced that year-to-date (YTD) sales through June from the top 100 real estate 'enterprises' were RMB 1.8 trillion, which is down -11.8% year-over-year (YoY). June sales were off -18.5% YoY, though improved +1.2% from May. Construction companies underperformed today on the real estate release. Banks were higher, as investors are anticipating high dividend payments, based on high balance sheet cash positions. Aerospace was hit with profit-taking after recent outperformance. Semiconductors and software both underperformed, as well, though I did not see a negative catalyst. June new energy vehicle (NEV), a category that includes both electric vehicles (EVs) and hybrid electric vehicles, delivery figures were released this morning. The below is courtesy of CnEVPost: Tesla is increasing the price of its Model 3 in China to RMB 285,500 from RMB 275,500. Tesla China also announced the installation of V4 super chargers in several cities. Today's anniversary of the turnover of Hong Kong reminds me of how little is taught in the West of the Opium Wars and the colonial powers' invasion of China. I understand why, as it isn't that pretty. I did not know very much about it until joining KraneShares, where, out of curiosity, I educated myself by reading several books. I've included an image below of the Shanghai International Settlement flag that includes the colonial powers that owned a piece of Shanghai. It is something that might be worth examining as it explains an element of today's geopolitical Webinar Join us Thursday, July 10, at 11 am EDT for: $5 Trillion Humanoid Robotics Opportunity – Capitalizing On The Boom Please click here to register New Content Read our latest article: KraneShares KOID ETF: Humanoid Robot Rings Nasdaq Opening Bell Please click here to read Chart1 Chart2 Chart3 Chart4
The Star
11-06-2025
- Automotive
- The Star
Price wars eroding auto industry profits
China's automotive industry has raised a collective alarm over what insiders called "involution-style" competition, as government authorities, industry associations and automakers said that an unchecked race to the bottom will endanger the sector's long-term health. According to the latest report from the China Automobile Dealers Association, price wars led to a cumulative retail loss of 177.6 billion yuan ($24.7 billion) in the new car market during the first 11 months of 2024, while over 60 car models saw price cuts in the first four months of this year. Another report by the China Association of Automobile Manufacturers showed that from January to April, revenue and costs of the country's auto industry rose by 7 percent and 8 percent year-on-year, but profits fell by 5.1 percent. China Iron and Steel Association issued a rare public rebuke of domestic automakers on Tuesday, accusing them of engaging in cutthroat price wars that have severely squeezed upstream suppliers' profits, leaving sectors such as steel with almost no profit margins. To move beyond the dilemma, Yang Xueliang, senior vice-president of Geely Holding Group, said the company will stop expanding capacity and instead repurpose existing global production bases. "Any company that engages in involution is bound to hit a dead end. Geely will never follow suit and will never become the king of involution, nor will we participate in vicious, destructive competition," Yang said. "We are committed to pursuing a path of open and healthy competition, and move beyond price wars and into value wars, technology wars, and service wars," he emphasised. Leading auto players are signalling support. Changan Auto vowed to avoid "bottomless competition," while BYD said it is betting on tech innovation to stay ahead. Since 2024, Chinese authorities have flagged "involution-style" competition as a systemic risk in high-level meetings. Several top auto associations have urged automakers to stop cutthroat competition. The Ministry of Industry and Information Technology said that price wars have no winners and no future and pledged to step up enforcement and push for structural upgrades in the industry. The China Auto Dealers Chamber of Commerce, which is under the All-China Federation of Industry and Commerce, released a proposal urging industry reform, seeking the rejection of reckless discounting and a return to fair, rational competition to preserve industry health. Dong Yang, former executive vice-chairman of CAAM, said: "Self-discipline alone won't solve the problem. It takes both a proactive government and a functioning market. Stricter law enforcement against unfair practices and targeted rules are needed to curb involution." The root cause of such competition, according to An Tiecheng, chairman of the China Automotive Technology and Research Center, is that the market is developing fast, shifting from expansion to stock competition. "Meanwhile, export prospects have been clouded by growing trade barriers, leaving automakers with little choice but to compete aggressively at home," he said. Such price wars take a toll on the whole supply chain, as suppliers are under pressure to cut component prices by 10 percent to 15 percent annually, which raises the risk of corners being cut on quality, he added. "Automakers should abandon short-term profit-seeking mindsets, build transparent supply chain management systems, and avoid excessively passing cost pressures along the value chain," he said. - China Daily/ANN
CNBC
29-05-2025
- Automotive
- CNBC
China's EV price war heats up — What's behind the big discounts?
BEIJING — Competition in China's electric car market just got fiercer with consequences for the domestic economy and even the global auto market. Industry giant BYD last week announced a slew of discounts — some of nearly 30% or more — across several of its lower-end battery-only and hybrid models. The budget-friendly Seagull compact car saw its price drop to 55,800 yuan ($7,750). Other major Chinese automakers have begun following suit. "BYD's action this time has made the industry rather nervous," Zhong Shi, an analyst with the China Automobile Dealers Association, said in Mandarin, translated by CNBC. "The industry is in [a state of] relatively large shock," he said, noting smaller automakers are now more worried about their ability to compete. The industry has been a rare bright spot in an economy that has been seeing slower growth and lackluster consumer demand. Part of Beijing's latest attempt to spur consumption included subsidies for new energy vehicles, a category that includes battery-only and hybrid-powered cars. "The latest car price competition underscores how supply-demand imbalance continues to fuel deflation," Morgan Stanley's Chief China Economist Robin Xing said in a report Wednesday. "There is growing rhetoric about the need for rebalancing [to more consumption], but recent developments suggest the old supply-driven model remains intact," he said. "Thus, reflation is likely to remain elusive." China's electric car market has already been in a price war for the last two years, partly fueled by Tesla. But this time, traditional automakers, including state-owned ones, are feeling significant heat as the share of new energy vehicles has come to account for about half of new passenger cars sold in China. Last week, Great Wall Motors Chairman Wei Jianjun warned of an "Evergrande" in China's auto industry that had yet to explode, comparing the fast-growing EV industry to the country's bloated real estate sector. The outspoken private sector autos executive was speaking to Chinese media outlet Sina in an interview posted on May 23. Once China's real estate giant, Evergrande defaulted on its debt in late 2021 as the property market slumped after Beijing cracked down on the company's high debt levels. Demand for homes also fell following tighter government regulations, leaving the developer struggling to finance the remaining construction of pre-sold units. As Chinese media scrutiny on automakers' financial situation rose, BYD on Wednesday refuted reports that it excessively pressured one of its dealers on cash flow. The dealer, Jinan Qiansheng in the eastern province of Shandong, did not immediately respond to a CNBC request for comment. BYD referred CNBC to its statement to Chinese media. In the early years of China's state-supported efforts to become a global leader in the emerging electric vehicle industry, the Ministry of Finance said it found at least five companies cheated the government of over 1 billion yuan ($140 million). The high-level policy encouraged a flood of startups, of which only a handful survived. In China, the average car retail price has fallen by around 19% over the past two years to around 165,000 yuan ($22,900), according to a Nomura report this week, citing industry data from Autohome Research Institute. Price cuts were far steeper for hybrid or range-extension vehicles, at 27% over the last two years, while battery-only cars saw prices slashed by 21%, the report said. It noted that traditional fuel-powered cars saw a below-average 18% price cut. In contrast, the average price of a new car in the U.S. was $48,699 in April, up nearly 1% from two years earlier, according to CNBC calculations of data from Cox Automotive. The average electric car price last month was an even higher $59,255. BYD's latest round of price cuts didn't include the company's higher-end models priced around 200,000 yuan, such as its flagship Han electric sedan. Reuters pointed out the newest model of the Han released in February was about 10% cheaper than its previous version, according to its calculations. The Chinese auto giant, which was backed by Warren Buffett in its early years, has rapidly captured market share in China with its wide range of cars at various price points. The company reported a net profit increase of 49% to 14.17 billion yuan last year. Total current liabilities rose by more than 60% to 57.15 billion yuan. Cash and cash equivalents fell slightly to 102.26 billion yuan. Rather than reflecting market expansion, double-digit growth of new energy vehicles sales in China is just eating into the business of internal combustion engine cars, Ying Wang, Fitch managing director, APAC Corporate ratings, told reporters Tuesday. She noted how the country's auto market hasn't grown much since 2018, and expects autos retail sales to only increase by low single digits this year. Automakers will keep on using price cuts to gain market share in China this year, she said. Wang pointed out another option is for companies to include more features, such as advanced driver-assist systems, for free instead of asking consumers to pay more for them as an add-on. Geely-backed Zeekr in March said it was releasing its advanced driver-assist system for free, while Tesla has attempted to charge its customers for a similar feature. A month earlier, BYD announced it was rolling out driver-assist capabilities to more than 20 of its car models. In the last several months, China's top leaders have increasingly called for efforts to address non-productive business competition, known as "involution." The term was mentioned in the premier's annual work report in March and in the market regulator's meeting last week which called for "comprehensively rectifying 'involutionary' competition." However, the massive effort to produce lower-cost electric cars in China, and the automakers' subsequent move to expand into other markets, has increased worries about the impact on other countries' auto industries. The European Union slapped tariffs on imports of China-made electric cars after probing the companies over the use of government subsidies in their manufacture. The U.S. also imposed duties of 100% on China-made electric cars, quashing hopes that the vehicles might enter the world's second-largest auto market. But in the EU, tariffs have had limited effect. In April, BYD outsold Tesla in Europe for the first time, according to JATO Dynamics. Tesla's Europe sales plunged by 49% that month, according to the European Automobile Manufacturers' Association.
Bloomberg
27-05-2025
- Automotive
- Bloomberg
China Summons Top Carmakers Over ‘Zero-Mileage' Used Vehicles
China's Ministry of Commerce is meeting with some of the country's biggest automakers to discuss whether the industry is using a loophole to mask weakening sales. The meeting, which was set to take place Tuesday afternoon, also included industry bodies such as the China Automobile Dealers Association and online car distribution channels, according to a memo shared by Li Yanwei, an official at the dealers' association, on Weibo.
