China auto industry urges automakers to cool price-cut hype

SHANGHAI BEIJING China's auto industry association on Wednesday urged automakers and authorities to cool price-cut hype to ensure the stable development of the industry.

The China Association of Automobile Manufacturers wrote in an article published on its WeChat account that a price war is not a long-term solution.

CAAM said automakers should work harder on technology and branding while local governments should use appropriate methods to promote and stabilise the economy.

More than 40 brands of electric and internal combustion engine ICE vehicles in China have offered aggressive discounts to create demand, following Tesla Inc's price war over market share.

Some of the programmes have been extended to automakers to encourage manufacturing because of the fact that local authorities have been rolling out buyer subsidies to drive demand.

The auto industry has a long supply chain that is a pillar of China's economy, contributing to a large portion of tax revenue and employment.