The condition of China's auto sector has deteriorated since China's largest electric vehicle company BYD decided to make huge price cuts. The company has reduced the prices of its 22 models by 34 percent. This also includes the electric car Seagull, which is now priced at $ 7,700. This promotion of the company is going to run till June, but this marketing campaign has become a challenge for other companies because now other auto companies may also have to resort to discounts to move ahead in this race, which can lead to a huge decline in the auto sector.
The company's focus is on volume, not margin
On monday itself, BYD's shares fell by more than 8 percent. Shares of other EV companies also registered a decline. Market experts believe that BYD's target is to sell 5.5 lakh vehicles in 2025, which is 30 percent more than last year. American analyst firm Morningstar Vincent sun says that the company is worried about volume, not margins.
Now this price war has gradually spread to the entire sector. Other companies like Geely, Leapmotor are also reducing the prices of their models. Experts believe that even though these price wars are short-lived, over time it can weaken the brand value and companies with weak balance sheets may be out of the race as not every company can bear the loss. oscar Wang of Haitong warned that if no effort is made to control the situation, there is every possibility of huge cost losses in the second half of 2025.
Companies are going into losses
Meanwhile, shares of Geely auto listed in hong kong Stock Market fell by 9.5%, Nio and Leapmotor shares fell by 3% and 8.5% respectively. In view of the increasing competition and losses in china, many foreign companies are looking for other global markets outside of here. india is also in this list, whose auto sector is growing rapidly. In such a situation, companies are setting up their manufacturing base or export base here. At the same time, the situation in china is such that some companies are selling cars at a price lower than the cost. There are also many startup companies in China's growing electric vehicle segment, which will have to face huge losses due to this price war.
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