Price Wars Intensify

“JV brands, primarily focusing on ICE vehicles, felt the squeeze in market share and were compelled to retaliate. Beijing Hyundai and GM Buick were quick to respond; Hyundai reduced the starting price of the new Elantra from CNY99,800 (US$13,800) to CNY75,800 (US$10,500), and Buick offered discounts of up to CNY65,000 (US$9,000) per vehicle. Even brands that were initially slow to react eventually joined the pricing war. Nissan lowered the Sylphy’s price to CNY69,800 (US$9,600), and Volkswagen’s Bora model, a competitor in the same segment, also saw a price drop to CNY68,000 (US$9,400), with a special emphasis on its ‘NEV value retention rate, indicating a highly competitive market.

“The premium segment was not spared from the price reductions, with Cadillac’s CT5 officially announcing a price cut of CNY70,000 (US$9700). German luxury brands like Mercedes-Benz and BMW also joined the trend, with BMW’s iX1 seeing the highest reduction of nearly CNY150,000 (US$20,700). The entry price for BMW’s i3 and iX3 was set at CNY200,000 (US$27,600), while the Mercedes-Benz EQA and EQB models went below the CNY200,000 (US$27,600) mark.

“These price reductions have accelerated the industry’s consolidation, with JV brands facing the dual challenge of shrinking market share and increased competition from new car-making forces. The impact of the price war is pushing the automotive industry into a phase of intense competition and potential market realignment,” said Zhang.