The price war initiated by billionaire Elon Musk’s Tesla has extended beyond auto electric to petrol-powered vehicles, with companies such as Peugeot’s Citroen, the German group Mercedes-Benz and Chevrolet looking to become subsidiaries of General Motors to protect their market share.
This comes after government subsidies in central China’s Hubei province, coupled with rebates from the state-backed Dongfeng Motor Group, drove down the prices of some auto such as the Citroen C6 by more than 40%, and the offer will continue until the end of the month, as reported by the “Bloomberg” agency and reviewed by ” News Agency”.
Chevrolet has begun offering discounts of up to 70,000 yuan on the Blazer, which starts at 230,000 yuan, along with other models like the Equinox and Monza.
Jilin province in northeast China is offering 150 million yuan in subsidies to people who buy this month auto produced by FAW Group Co. up to 37,000 yuan on singles auto.
According to a media local, incentives were offered on about 30 auto electric and conventional cars from BYD, Nio, Toyota Motor and Ford Motor as of last Thursday.
Auto sales are recovering slower than expected after China abandons its policy”zero Covid” in December. Sales of auto gasoline-powered vehicles were hit as demand for electric vehicles continued to grow, driven by price cuts by Tesla and BYD companies. Sales of auto with internal combustion engine decreased by 13% in 2022, while sales of auto electric batteries increased by 74% and sales of auto electric. in hybrid vehicles increased by 161%, according to the China Passenger Car Association.
For his part, Ron Qing, a partner at Shanghai-based consultancy Roland Berger, said the Hubei government’s move was clearly aimed at boosting sales of auto why consumers are still cautious about spending.
“A significant drop in prices will have a significant impact on the residual value of auto used, as well as on brand loyalty, and I think this move may be a bit short-sighted,” added Cheng.
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