Car Brands in China to Reduce Incentives and Withdraw from Price War

TapTechNews August 10th news, according to The Paper report, a salesperson at a NIO 4S store in Shanghai disclosed to the reporter that starting from August 11th, the cancellation of the car purchase subsidy will make the preferential models have a difference of at least 10,000 yuan ($1,441.89) in price. Another NIO store salesperson said, There will just be fewer things given as gifts, and the intensity will not be as preferential as it is now.

In addition, Ideal Auto, FAW-Volkswagen and other brands also spread the news of shrinking the preferential range. The reporter learned from the Ideal Auto salesperson that the special preferential of the loan interest rate as low as 1.99% and a subsidy of 5,000 yuan ($720.95) for Ideal L6 at this stage will end on August 13th.

A salesperson at a FAW-Volkswagen 4S store in Shanghai disclosed that after August 15th, the preferential for all models will be reduced. The Toyota salesperson also confirmed the contraction of the preferential intensity. Regarding the reason for the price increase, the salesperson explained that the production target of the enterprise in the second half of the year will not be so high, and it is expected that the output will be reduced. The salesperson of Volvo also mentioned the possibility of production reduction in the second half of the year.

TapTechNews noticed that as early as July 11th, there was news that due to the price war, the store suffered serious losses. BMW has been reducing the sales volume since July to stabilize the price and relieve the operating pressure of the store. In response to the rumor that BMW China will withdraw from the price war, BMW China responded that in the second half of the year, BMW in the Chinese market will focus on the quality of business and support dealers to make steady progress.

Subsequently, it was reported that many brands such as Volkswagen, Toyota, Honda, and Volvo also all decided to adjust the terminal policy from July, reduce the terminal preferential intensity, or no longer further reduce the price.

However, the previous price war seems not to have brought an increase in sales to brands such as BMW. BMW Group sold 375,900 BMW and MINI new cars in China in the first half of 2024, a year-on-year decrease of 4.2%; the sales volume in China in the second quarter of this year reached 188,500, a year-on-year decrease of 4.7%.