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On August 7, 2024, a shop in the Beijing shopping center.
Pedro Parda | AFP | Gets the image
Fierce Price wars in China They get into the industry from cars to the supply of food to solar panels, squeezing profits and worsening the deflationary slide of the country. Although consumers can seize ultra-tuman deals, compromises are more difficult for them than they may seem.
Since the pandemic and against the background of current housing, Chinese consumers have grown more up to pricesfocusing on the value and reduction of insignificant costs. In order to remain competitive, manufacturers rolled out steep discounts and low prices – helped government subsidies – deepening the price war that has been burning for years.
In the so -called instant trade sector Alibaba. Jd.com and Meituan Conduct races for expanding networks and promise billions of subsidies, attract customers sentences Like a bubble of tea at simple cents.
It is not difficult to see an appeal that contains a tendency for some consumers.
Lee kong, resident of Beijing, looks at the model of Chinese electric vehicles XPengHe said he was immediately caught after the seller called him about new subsidies.
“The more difficult the manufacturers compete, the better for the buyers,” Lee said. “Congratulation as you wish!”
But the timing of the purchase can feel a gambling game when prices are down after that, said Yu. Peng, a resident of Beijing, who plans to update the car. “As a consumer, everything you can do is to accept it calmly,” he said. However, he shrugged with the Chinese language, “Buy early, enjoy early.”
Hidden costs
Cutthroat competition comes with hidden costs.
Some buyers in China have acknowledged that safety and quality can suffer when automakers cut corners to remain cheap, citing. Currently, Beijing is concerned that price wars are not just damaging companies and suppliers, but also wages, tax revenues and the whole economy.
In recent weeks, Chinese state media have intensified criticism of price wars. This month, Kuussi, the publication of the Communist Party of China, warned that the race to the bottom could force the company to reduce the necessary costs for production and compromises, causing “bad money expelled” and ultimately damage the interests of consumers. “The comment also crashed into some local authorities.
On Wednesday, the Chinese office promised to regulate what he calls “irrational” competition through tougher expenses and prices, as well as led the competition from who is cheaper to the one who has the best technology and caliber.
So far, the maintenance of the market share remains a priority for many car manufacturers, analysts say.
From the market saturated by many brands and similar models, manufacturers who do not want to lose market share believe that the only way to survive in the short term is to reduce prices, said Felipe Munosis, a car analyst in Jato.
Jim Ma, the sales manager of the Chinese-Swedish car Lynk & Co, said the company was not focused on short-term income, but on the construction of loyalty over time. Its new hybrid plugin has a mini-caller, a rotating seat and an LED message lane. Competition has made buyers more sensitive to prices, but many valuable security, customer support or specific projects such as car entertainment for children, he added.
“Our pricing policy is designed to make customers like that and choose our brand,” MA said. “Ultimately, if they need services after sales or decide to replace or buy a new car, we hope they still choose us.”
The effect of pulsation
The effects of ripple pricing of Chinese pricing are also felt abroad – diverse.
Some consumers beyond China welcome a fog that causes automakers worldwide to offer better products.
Julia Polyiscanova, Senior Director of Vehicles for Transport and Environment, said Chinese EVS helped fill the gap left by slow European brands. Although in Europe they are not as cheap as in China, their prices are often still a little lower, either they offer the best range or software at the same price, she said.
But the policy also plays when Europe negotiates tariffs and minimum prices at EVS with China. The key question, she said, is how to encourage Chinese car manufacturers and battery to localize their supply networks to Europe to create a domestic industry – just like Japanese and Korean brands did decades ago. Some Chinese companies have an effort, especially in the market of a small car in Europe.
While consumers in Europe usually care about quality than the origin of the car, they are also worried about broader economic consequences, Polycian said.
“They just want to make sure that it will not lead to, for example, their neighbor or anyone in the neighboring village, which is losing work,” she said.
Freod and Volvo cars There are automakers who have been cutting work in Europe in recent months, partly conditioned by competition with Chinese rivals.
