Automaker Calls for Industry Cooperation Amid Price War Concerns
At the 2025 China Automotive Chongqing Forum on June 7, Li Shufu, Chairman of Geely Holding Group, delivered a video message highlighting severe overcapacity in the global automotive industry. The Chinese automaker announced it would halt construction of new production facilities to avoid redundant investments, instead focusing on utilizing existing global capacity through strategic partnerships and resource restructuring.
“The automotive sector must adopt a cooperative approach to compete responsibly in international markets,” Li stated during the virtual appearance.
Geely Executives Condemn Industry “Self-Destructive” Practices
Yang Xueliang, Senior Vice President of Zhejiang Geely Holding Group, sharply criticized cutthroat market practices, describing price wars as “the lowest form of competition” during the same forum.
“”Internal卷 [involution] represents an economic and academic consensus as suicidal恶性 competition,” Yang asserted. “This race to the bottom risks collective collapse across China’s auto industry.””
The executive outlined Geely’s competitive philosophy: “”Regardless of market pressures or rival tactics, we reject cutthroat pricing battles. Our strategy emphasizes value-driven competition through technology, quality, service, brand integrity, and corporate ethics—while maintaining price competitiveness.””
In a notable aside, Yang publicly defended Great Wall Motors Chairman Wei Jianjun, calling him “”an honest industry whistleblower”” who faced undue criticism over the past two years.
Auto Industry Faces Profitability Crisis Despite Record Sales
Official data reveals troubling trends beneath 2024’s record production and sales figures:
- China manufactured and sold over 31 million vehicles last year
- New energy vehicle (NEV) sales surpassed 10 million units
- Industry profit margins slumped to 4.3%, below downstream industrial averages
- The downward spiral continues in 2025:
- Q1-Q4 production/sales exceeded 10 million units
- Over 60 models have undergone price cuts
- Multiple automakers report shrinking margins
“Anti-Involution” Movement Gains Momentum
The 2025 Greater Bay Area Auto Show in Shenzhen showcased industry contradictions—boasting 180,000 opening-day attendees and hundreds of new models, while the China Association of Automobile Manufacturers (CAAM) circulated a landmark “anti-involution” manifesto.
Analysts warn price wars jeopardize critical R&D funding, particularly for NEV manufacturers undergoing technological transitions. Consumers may face hidden risks including:
- Substandard materials from cost-cutting measures
- Supply chain payment delays
- Compromised product safety from reduced oversight
“”Short-term market share growth through pricing strategies is understandable,”” commented one industry observer. “”But sustained unprofitability risks derailing China’s automotive ambitions—this isn’t a sprint, but a marathon requiring resilience and strategic patience.””
The developments signal a pivotal moment as China’s auto giants balance global expansion with sustainable practices in an increasingly volatile market.
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