The world’s largest auto market is in the midst of a heated price war, and the situation is only intensifying, making the market ideal for many consumers.
In the first quarter, a total of 649 variants of passenger cars, or around 20 percent of all vehicles on the market, saw the transaction price drop of more than 10,000 yuan ($1,500), data compiled by research provider China Auto Market show.
Back in February, that percentage was just 12 percent of all cars, and it was as low as 6 percent this time last year.
Domestic and international automakers are aggressively cutting prices.
Wuling Motors is offering up to 10,000 yuan ($1,454) in subsidies including cash discounts on new energy models until May 31, the company said in a statement on Monday.
The Wuling Hongguang Mini EV, which Wuling Motors makes through a partnership with SAIC Motor Corp and General Motors, is one of the best selling EV models in China.
Some automakers have initiated price reductions quickly on their own as they saw what was happening around them, while others have piggybacked off incentives offered by local governments as part of broader economic-stimulus packages.
In March, for example, government subsidies in Hubei province in central China, together with discounts from state-backed Dongfeng Motor Group Co., slashed the price of the Citroen C6 by more than 40 percent.
Tesla Inc. arguably kicked all this off when it cut prices of its locally built models by as much as 14 percent in early 2023.
But despite an initial lead regarding the degree of price cuts, the US automaker has now fallen behind in terms of who’s offering the steepest discounts — an indication of the extreme pressure affecting the entire industry, from carmakers through to dealerships.
Toyota Motor Corp.’s bZ4X, an electric crossover, has recorded the most significant sustained price drop this year in China, the data shows. The model’s 400 kilometer-range Elite JOY version had a transaction price of 139,380 yuan in March, 30 percent down from 199,800 yuan in December.
German premium makers Audi and BMW are also offering generous discounts, particularly on electric models. It’s become a full-blown price war spanning gasoline to electric vehicles and sensing new energy upstarts as much as it is legacy automakers.