Chinese Automakers Lament: Price War Effect Fading, Profits a Miracle

China's electric vehicle (EV) industry is developing rapidly, but prices continue to fall, resulting in a phenomenon known as 'neijuan' (excessive competition). Wang Xia, President of the China Council for the Promotion of International Trade's Automotive Industry Committee, stated today that China's auto industry is experiencing a rare simultaneous decline in sales volume, revenue, and profit margins, indicating that the marginal benefits of price wars are rapidly diminishing. Wan Liangyu, CEO of Mengshi Automobile, bluntly remarked that 'making a profit is already a blessing' in today's Chinese auto market.

According to the 'Daily Economic News,' the '2026 China Automotive Chongqing Forum' was held today in Chongqing. Wang Xia, who also serves as President of the China Chamber of International Commerce's Automotive Industry Association, pointed out that over 100 new car models were launched in China from January to May this year, yet sales have contracted. Moreover, the automotive industry's profit margin in the first quarter of this year dropped to just 3.2%, a new record low.

Wang Xia noted that automotive manufacturing revenue in China also slightly declined year-on-year in the first quarter, marking a rare triple downturn in sales, revenue, and profitability. This signals that the marginal effectiveness of price wars is accelerating in its decline.

NIO Chairman Li Bin, attending the forum, predicted that the decline in China's domestic auto retail market (sales volume) will further widen to over 22% this year, urging stakeholders to prepare for a full-year drop of 15% to 20%.

Mounting pressure in the domestic market is forcing automakers to seek opportunities overseas. Wu Jian, Executive Committee Member of GAC Group, stated that the Chinese auto industry has reached a point where 'going global is no longer optional,' advocating a strategy of 'achieving volume domestically and generating profits abroad.'

Wan Liangyu of Mengshi Automobile lamented that price wars are eroding consumer trust and warned against 'drinking poison to quench thirst,' emphasizing the need for value creation instead. He noted that the golden era of the Chinese auto industry—when 'producing meant profit'—is long gone, and today, 'making a profit is already a miracle.' (Editor: Qiu Guoqiang / Lu Jiarong)