Recently, the China Association of Automobile Manufacturers (CAAM) issued an Initiative on Maintaining Fair Competition and Fostering Healthy Industry Development. An official in charge from the Ministry of Industry and Information Technology (MIIT) responded to media inquiries, particularly regarding how to view this initiative and what measures will be taken to tackle the “price wars” and other forms of “involution-style” competition in the automotive industry.

The official expressed support for CAAM’s proposal to maintain fair competition and foster healthy industry development, warning that the disorderly price wars among automakers have significantly disrupted normal business operations and threatened the industry’s healthy and sustainable development.

Automakers are encouraged to reduce production costs through technological and managerial innovation, thereby delivering higher-quality and cost-effective products to consumers. Disorderly price cuts, a typical example of “involution-style” competition, undermine sustained investment in R&D, reduce product performance and service quality, and may even lead to safety issues that harm consumer rights and interests. In the long run, such practices will weaken the industry’s intrinsic momentum for growth. Simply put, there are no winners in a price war, nor is there any future.

To deal with the issue, the MIIT will intensify efforts to rein in “involution-style” competition in the automotive industry. Measures include promoting industrial structure upgrades, strengthening random inspections for product consistency, cooperating with relevant authorities in combating unfair competition, and adopting necessary regulatory actions. The aim is to safeguard a fair and orderly market environment, effectively protect consumers’ fundamental interests, and drive high-quality development of the automotive industry.

The official stated that all automakers should adhere to the principle of fair competition and a quality-first approach, continuously improve product standards and service quality through technological innovation, fulfill their social responsibilities, and build strong brand reputations.

Source: Xinhua News Agency