BYD has warned that China’s car industry will face a sharp contraction as Beijing intensifies its campaign against aggressive discounting, saying that about 100 manufacturers will need to exit the market.

Talking to Financial Times, the company’s executive Vice-President Stella Li said at the Munich motor show that “some of the original equipment makers will be pushed out” following the government’s clampdown. “Even 20 OEMs is too much,” she added.

China’s car sector has been at the centre of President Xi Jinping’s push against price wars, with officials blaming steep discounts, known locally as neijuan or “involution”, for contributing to deflation.

Market consolidation expected
Until now, around 130 manufacturers have been competing for share in the world’s largest market for battery-electric and plug-in hybrid vehicles. Analysts now expect that number to fall.

According to Financial Times, consulting firm AlixPartners has forecast that of the 129 brands selling electric and hybrid cars in 2024, only 15 will remain financially viable by 2030. Rival Chinese carmaker Xpeng has previously predicted that the global car industry could shrink to as few as 10 players within the next decade.

Li said that reduced discounting would benefit BYD by shifting consumer decisions towards technology and driving experience. But analysts noted that the group, which competes with Tesla as the world’s largest electric vehicle maker, is not immune to domestic pressures.

BYD reported weaker than expected revenues and profits in the second quarter, affected by the government’s crackdown on long-term supplier payment practices and discounting.

https://www.google.com/amp/s/auto.economict...-wars/123783424

Kek

It's inevitable that the industry to consolidate into a few strong brands only

More bricked car soon as car is dead without latest software update.