It specifically mentioned that "price wars" endanger the healthy development of the industry: high quality and low price are important advantages to attract consumers. However, relying solely on "price wars" to gain competitive advantages is "too much".
In an interview, An Tiecheng, chairman of China Automotive Technology Research Center Co., Ltd., said:
On the one hand, "price wars" will cause auto companies to over-focus on short-term interests and ignore long-term innovation and R&D investment, which is not conducive to the cultivation and formation of global competitiveness; on the other hand, "price wars" will bring risks to product quality and after-sales service.
"The purchase price of parts caused by "involutionary" competition has continued to decline by 10% to 15% year after year, and the upstream business has deteriorated. It is difficult to avoid suppliers lowering quality requirements in some aspects. Downstream dealers have deteriorated their operations and even partially closed down, resulting in a decline in the timeliness, convenience and reliability of after-sales service."
At present, China's automobile industry is in the stage of transformation from a "big automobile country" to a "strong automobile country", and will inevitably experience a certain degree of intensified competition, survival of the fittest, and transformation pains.
Specifically, the reasons include the imbalance of supply and demand, the industrial structure has not yet reached the ideal form, the lack of innovation momentum has led to intensified homogeneous competition, and electrification and intelligence have driven down supply chain costs.
An Tiecheng said, "Compared with developed economies, the concentration of my country's automobile market is relatively low. In 2024, the market share of the top three automakers in my country will be about 36.2%, and the market share of the top five will be about 53.1%, which is significantly lower than that of the United States, Europe and Japan."
In addition, some countries or regions restrict China's automobile exports through tariffs, technical indicators, carbon barriers and other means, making it more difficult and risky to open up overseas markets, and further highlighting the importance of the domestic market.
Industry insiders believe that Chinese automakers must dare to say no to "involutionary" competition, consolidate their advantages and break through with innovation and quality, and realize the transformation of business strategies from price competition to value competition.