Reuters (September 4)
“China’s automotive industry must seem like an unstoppable force to outsiders.” Nevertheless, “scores of their carmakers are heading for a crash.” They remain challenged by “a vicious price war that has lasted more than two years,” with Chinese policymakers expect an “involution” or “frantic, self-destructive struggle.” Government officials are struggling to bring the price war to an end, but their measures have not addressed overcapacity. Sales of passenger vehicles stood at 27.6 million in 2024, while “production capacity hit 55.6 million units, more than 50% higher than a decade ago.”
Tags: Automotive industry, Carmakers, China, Frantic, Government, Involution, Officials, Overcapacity, Passenger vehicles, Policymakers, Price war, Production, Self-destructive, Struggle
South China Morning Post (January 5)
“More than 30,000 car dealers in mainland China are facing another bleak year in 2025, with many turning from profit-generators into corporate failures in two years under a debilitating price war and an e-commerce onslaught.” Amid the switch to EVs, price wars “resulted in 177.6 billion yuan (US$24.3 billion) of losses between January and November” with the “financial squeeze” blamed for the closure of approximately 4,000 dealerships.
Tags: 2025, Bleak, Cars, China, Closure, Corporate failures, Dealerships, Debilitating, E-commerce, EV, Financial squeeze, Losses, Price war, Profit-generators
Economist (February 18, 2012)
Overcapacity is plaguing European automakers. EU sales have dropped four straight years and are expected to decrease again this year. A price war, with discounts of up to 30%, has resulted as car makers struggle to sell units. “As the firms’ bosses face up to the need for big capacity cuts, the politicians must resist back-seat driving.” Some factories will need to be closed and some production work shifted overseas.
Overcapacity is plaguing European automakers. EU sales have dropped four straight years and are expected to decrease this year. A price war, with discounts of up to 30%, has resulted as car makers struggle to sell units. “As the firms’ bosses face up to the need for big capacity cuts, the politicians must resist back-seat driving.”
Tags: Automakers, EU, Overcapacity, Politicians, Price war, Sales decline
