China Car Wars Shift to New Battlefields
China's Auto Price Wars Enter New Phase
Beijing has achieved some wins in its fight against excessive competition over the past year. Discounts have decreased and manufacturers like BYD are paying suppliers faster. However, persistent overcapacity is shifting the battleground elsewhere.
New Supplier Payment Rules
June 1 marks one year since new rules requiring Chinese carmakers to settle most payments with suppliers within 60 days. In May last year, the Ministry of Industry and Information Technology and the China Association of Automobile Manufacturers warned about the negative impacts of price wars.
Overcapacity Persists
These moves were part of a broader campaign against the industry's 'involution' – a term for excessive, self-destructive competition. Yet overcapacity remains, pushing competition to new fronts.
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