China to Enhance Regulation in the Automotive Industry Amidst Price Wars

On July 28, a meeting was held in Beijing with officials from the national industrial and information technology authorities. It was mentioned that there will be a further deepening of reforms to enhance the modernization of industry governance. The implementation of reform tasks will be accelerated, and the preparation of the 14th Five-Year Plan will be emphasized. The meeting also addressed the need to consolidate the results of comprehensive rectification in the 'involution' competition within the new energy vehicle industry, and to strengthen governance in key sectors such as photovoltaics, thereby forcing the exit of outdated production capacities through standards. In May, a relevant official from the Ministry of Industry and Information Technology stated that the 'price war' among car companies has significantly impacted normal production and operations, jeopardizing the health and sustainable development of the industry. Companies are encouraged to reduce production costs through technological and management innovations, providing consumers with higher quality and more cost-effective products. However, the disorderly 'price war' is a typical manifestation of 'involution' competition, which is detrimental to sustained R&D investment, affects product quality and service levels, and could even pose safety risks, harming consumer rights. The Ministry will intensify efforts to rectify 'involution' competition in the automotive industry, promote optimization and adjustment of the industrial structure, strengthen consistency checks on products, collaborate with relevant departments to enforce anti-unfair competition laws, and take necessary regulatory measures to maintain a fair and orderly market environment, ensuring the fundamental interests of consumers and promoting high-quality development of the automotive industry.