Three Departments Issue Joint Document: Selling Cars to the World Does Not Mean Waging a Price War Across the World

The three-year price war in the domestic car market has finally reached Ro-Ro vessels.

 

On September 1, the Ministry of Commerce, Ministry of Industry and Information Technology, and State Administration for Market Regulation jointly issued the "Guidelines on Overseas Competition Behavior and Compliance Construction for the Automobile Industry" for enterprises to reference. The "Guidelines" consist of four chapters and twenty articles, mainly including regulating overseas market competition behavior and improving overseas localized compliance operation capabilities.

 

Most notably, the three departments specifically reminded car manufacturers: Overseas pricing should be based on cost and market supply and demand, with clear price tiers set to avoid frequent and significant price adjustments.

 

To put it plainly: Car prices can drop, but avoid promotions in the morning and compensation in the afternoon, then lowering prices again after a few days under a different excuse. Chinese cars can compete overseas, but they cannot turn overseas markets into a second price war battlefield.

In September 2024, SAIC MG lowered the drive-away price of the MG4 51 Excite in the Australian market to 30,990 Australian Dollars, with a maximum discount of 10,425 Australian Dollars, nearly a quarter of the original price. New car owners were naturally happy, but old car owners watched the resale value of used cars plummet.

 

To appease owners, MG subsequently proposed a rather creative "compensation": Old owners can enjoy a car price discount when trading in for another MG. In other words, to receive compensation, one must buy another car first. Some owners stated that brand loyalty had been exhausted. The price cut was intended to sell more cars, but in the end, it deterred the earliest supporters of the brand.

 

 

Great Wall Ora was not idle either. Its drive-away price in Victoria dropped from over 47,000 Australian Dollars at launch to 35,990 Australian Dollars in early 2024, followed by additional discounts of 2,000 to 6,000 Australian Dollars for different versions.

 

Several Chinese brands took turns sitting in the position of "Australia's cheapest electric vehicle". However, this seat does not last long: If you announce the lowest price today, you might be pushed down by another tomorrow. Consumers have learned to wait and see, and dealers dare not stock up.

 

The story in the Thai market is even more direct. Neta Motors' NETA V-II was originally priced at 549,000 Thai Baht. During inventory clearance in 2025, it dropped to 299,000 Thai Baht at one point, with some vehicles no longer including warranty. Prices were cut almost in half, but consumers were worried: Are there still spare parts? Who will handle after-sales service? Will the brand still exist next year?

 

Later, dealerships closed, employees resigned, and the Thailand Consumer Protection Agency intervened due to complaints. Car prices became half as cheap, and market confidence was cut down almost together with them.

 

 

Russia was also not spared the price war. In 2025, discounts on some Chinese cars reached 1 million Russian Rubles. Russia's largest car manufacturer, Volga Motors, publicly accused Chinese car companies of "dumping", demanding government investigation.

 

Dealers were also having a hard time. Whole vehicle prices dropped too quickly, causing inventory depreciation. Dealers originally preparing to invest in repair services also started reconsidering. Car companies gained sales volume, but dealers lost profits from comprehensive after-sales service.

This plot is actually not unfamiliar. In the late 1990s, Chinese motorcycles entered Vietnam with low prices, seizing about 80% of the market at one point. Subsequently, more than 70 companies flocked in, driving whole vehicle export prices down to 170 U.S. Dollars, earning an average of only 30 CNY per car sold.

 

Profits disappeared, followed by reduced specifications, counterfeits, spare part supply cuts, and after-sales failures. Chinese motorcycles initially drove out Japanese brands with prices, but eventually drove themselves out with prices. Vietnam subsequently raised tariffs and tightened entry requirements; this market has not been fully regained for over twenty years.

 

Today, the scale of Chinese cars going overseas is incomparable to those years. In 2025, Chinese car exports reached 8.32 million units, sold to over 200 countries and regions, with enterprises investing in the automobile manufacturing industry in over 80 countries.

 

The bigger the setup, the less one can only think about selling cars. Building factories, hiring people, repair, handling data—any of these is more complex than price reductions. The second half of the "Guidelines" discusses labor, intellectual property, quality, and after-sales service. In the end, it requires Chinese car companies to change from "doing exports" to "doing operations".

Waging a price war domestically primarily hurts corporate profits and dealerships. But overseas, if a brand messes up prices, it could damage the image of all Chinese cars. Local consumers will not patiently distinguish which car company caused the problem. Regulatory bodies may also translate low prices into "dumping", "subsidies", and "industrial threats", followed by investigations, tariffs, and restrictions.

 

Chinese cars already have the qualification to sell technology, products, and brands overseas. There is really no need to cheaply sell themselves into a price tag that can be rewritten at any time.

 

Editor's Comment

If the price war continues, what is eliminated is not just the profits of car companies, but the trust of dealers, consumers, and host countries. When tariffs and entry barriers surround from all sides, although Chinese cars may seem to have fought a price war across the world, they will eventually become "isolated outcasts" isolated by the global automobile industry.

 

Selling cars to the world does not mean waging a price war across the world. True globalization is integrating into the world, not turning the world into a battlefield.