A Jetour model on display at the Beijing Auto Show in April 2026. Credit: CnEVPost
- China requires carmakers to strictly comply with pricing regulations, strengthen price compliance and enhance product quality control.
- The regulatory talks come amid a prolonged price war and weak retail demand.
Two Chinese regulators on Thursday summoned and warned automakers suspected of engaging in irrational competition, the latest move by authorities to rein in a protracted price war in the auto industry.
The Ministry of Industry and Information Technology (MIIT) and the State Administration for Market Regulation (SAMR) required the companies to strictly comply with laws and regulations including the Price Law and the rules on curbing below-cost dumping, according to a statement released by the MIIT.
The regulators also required the companies to strengthen price compliance and product quality control in line with the compliance guidelines for pricing behavior in the auto industry, and to effectively protect consumers’ legitimate rights and interests.
The two regulators said the move aims to jointly maintain a market order featuring quality products at fair prices and healthy competition.
The statement did not mention which companies were summoned.
The regulatory action comes as China’s auto market undergoes a deep adjustment. The China Passenger Car Association (CPCA) warned this week that the industry’s price war is still ongoing.
Consumers’ strong expectations of further price cuts and new models have led to weak retail demand, the CPCA said in a report yesterday.
Dealers, taking a cautious view on future sales, are proactively reducing their purchases to avoid inventory buildup, according to the CPCA.
China’s passenger car retail sales totaled 1.51 million units in May, down a sharp 22.1% year on year. Of these, new energy vehicle (NEV) retail sales came in at 950,000 units, down 7.5% from a year earlier, marking the fifth consecutive month of year-on-year decline.
China Passenger Car Retail Sales 2024-2026
Month
2024
2025
2026
January
2,040,605
1,793,611
1,544,000
February
1,100,269
1,383,965
1,034,000
March
1,695,722
1,940,000
1,648,000
April
1,533,151
1,755,000
1,384,000
May
1,705,125
1,932,000
1,510,000
June
1,764,300
2,084,000
July
1,718,525
1,826,000
August
1,907,066
1,995,000
September
2,108,144
2,241,000
October
2,260,638
2,242,000
November
2,421,718
2,225,000
December
2,634,165
2,261,000
China passenger car retail sales
2024
2025
2026
However, with gasoline car sales shrinking at an accelerating pace amid high fuel prices, China’s NEV retail penetration rate climbed to a record high of 62.9% in May. In the first week of June, the figure rose further to 66.7%.
Overseas markets are becoming a core growth engine for Chinese NEV makers. China exported 424,000 NEVs in May, surging 112.6% year on year and accounting for 54% of total passenger car exports, the highest proportion on record.
Cui proposes a statutory tax based on driving mileage and vehicle weight to address structural imbalances caused by declining fuel tax revenues.
