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Price War Squeezes Chinese Carmakers With No Relief in Sight

  • Discounts have escalated in world’s biggest auto market
  • BYD is an outlier with robust growth in deliveries, profits
A BYD Destroyer 07 plug-in-hybrid-electric vehicle.
A BYD Destroyer 07 plug-in-hybrid-electric vehicle.Photographer: Qilai Shen/Bloomberg

China’s increasingly heated car price war is exacting a heavy toll on automakers. Steep discounts have failed to reverse a slide in sales for most manufacturers, and earnings have taken a hit.   

A Bloomberg analysis of first-quarter results from more than a dozen Chinese automakers showed revenue and profit margins are under pressure. Save for a few exceptions such as BYD Co. and Changan Automobile Group Co., most top listed Chinese automakers suffered a decline in profits — the worst showing since the beginning of 2020, when the industry was crunched by the start of the pandemic.