Could price war in China’s cars sector be over after better-than-expected sales put an end to discounts?
- Deliveries by Chinese carmakers rose 46 per cent month on month in the first week of May, China Passenger Car Association data shows
- ‘Positive signs’ can be seen in the market, Citic says in a research report
Major carmakers – particularly those making conventional vehicles – have stopped cutting prices to compete against each other after they reported a jump in deliveries for the first week of May, according to Citic Securities. Chinese carmakers delivered 375,000 units to customers in the first week of May, an increase of 46 per cent over the same period in April, data from the China Passenger Car Association shows.
“Positive signs can be observed [in] the market,” Citic said in a research report published on Thursday. “Some carmakers and auto brands have stopped offering further discounts through their dealers.”
Citic did not provide exact numbers to reflect the car price changes in mainland China, but said all signs suggested that a downward spiral in car prices had run out of steam after four months of fierce competition. The prices of some cars had rebounded this month, the report added without elaborating.
The Citic report is significant because China’s automotive sector has been affected by its slumbering economy since late last year, after consumers became reluctant about big-ticket items such as cars due to concerns about jobs and incomes.