China Plans Tougher Regulations Targeting Carmaker Price War
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Article content(Bloomberg) — China’s market regulator released new draft guidelines aimed at stopping automakers from pricing models too cheaply as part of efforts to curb cutthroat competition that’s fueling deflationary pressure. Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentThe new rules set price-compliance requirements for vehicle and parts production to pricing strategy and sales practices, according to the draft released by the State Administration for Market Regulation on Friday. Automakers will face “significant legal risks” if they set sale prices below production costs to exclude competitors or monopolize the market, it said. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle content“Rapid market growth, especially in new energy vehicles, has brought new business models and increasingly complex pricing,” the regulator said Friday. “Problems such as irregular price displays, fraud, collusion and irrational competition have disrupted the market and harmed consumers and businesses.” Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentChina’s campaign to stamp out an electric vehicle price war comes as carmakers grapple with overcapacity and lackluster consumer sentiment. The number of brands selling battery-powered and plug-in hybrid vehicles has fallen from 500 to about 129 in recent years. Just over a dozen of those are expected to be financially viable by the end of the decade, according to consultancy AlixPartners.Article contentThe watchdog’s proposed new rules target unfair pricing as well as collusion among manufacturers or spare-parts suppliers. The regulator is seeking public opinion on the draft rules and responses are due Dec. 22. Article contentManufacturing overcapacity and falling prices have resulted in what’s called “neijuan,” or “involution,” in China, whereby hyper-competition brings diminishing returns. The phenomenon is heightening tensions with trading partners as Chinese producers look to export more of their low-cost goods.Article contentAutomakers including BYD Co. and Xpeng Inc. voiced support for the regulator’s draft rules, saying they will strengthen compliance and pledged to strictly avoid price fraud or unfair competition, according to company statements. Article content—With assistance from Linda Lew.Article content(Adds responses from BYD, Xpeng in last paragraph.)Article contentTrending Couple's TFSAs, RRSPs and non-registered accounts are 90% equities. Should they be more conservative toward retirement?
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Personal Finance Canadian households boost their wealth to another record high of $18.4 trillion with ‘supercharged' financial asset growth Wealth CRA penalized taxpayer for repeated failure to report income Personal Finance 'Wild West out there': Cargo theft reports soar in Canada, but that's just the tip of the iceberg News This generation of Canadians is rapidly increasing its wealth and may soon unseat the boomers Wealth