Chinese officials summoned the heads of major electric vehicle makers, including BYD Co., to Beijing earlier this week to address concerns about the long-running price war, according to people familiar with the matter.
The meeting was hosted by the Ministry of Industry and Information Technology, the market regulator and the top economic planning agency, said the people, who asked not to be identified discussing private information. The gathering was attended by senior executives from more than a dozen manufacturers that also included Zhejiang Geely Holding Group Co. and Xiaomi Corp., the people said.
It’s rare for China’s market, industry, and economic regulators to jointly host a meeting with the car industry on operational matters like pricing. The move shows how much scrutiny the nation’s top leadership is paying to the sector, amid concerns the price war is becoming unsustainable and could send weaker companies into bankruptcy. However, the gathering didn’t result in a mandatory directive and it’s not clear what consequences manufacturers would face if they don’t follow the verbal warnings, the people said.
BYD and Xiaomi didn’t respond to requests for comments. A representative from Geely referred to a recent speech by chairman Li Shufu who said the company resolutely rejects price wars and will compete on technology and its values.
The Ministry of Industry and Information Technology, the State Administration for Market Regulation and the National Development & Reform Commission didn’t reply to faxed questions. The Ministry of Commerce said during a routine briefing on Thursday that it will work with other departments to strengthen guidance for the auto industry, ensure fair competition and promote healthy development.
This week’s meeting marked the second time in recent days that industry leaders have been rebuked over “zero-mileage” cars—a practice in which automakers that have failed to meet their sales targets offload new vehicles to supply chain financing companies or used car dealers.
These essentially new cars then appear on the resale market with no mileage, while manufacturers record them as sales despite them not having reaching the end-consumer. The Ministry of Commerce also met with at least two major carmakers and online used cars platforms last week on the issue.
