An Qingheng Analyzes Downward Pressure on the Automotive Market

[Market Analysis] An Qingheng, Chairman of the Advisory Committee of China's Automotive Industry, warns that the industry has entered a phase of intense competition in a saturated market.

Key Data: Passenger Vehicle Sales Plummet by Over 24% Year-on-Year

According to data from the China Association of Automobile Manufacturers (CAAM), passenger vehicle sales in June dropped by 26.4% year-on-year, with a cumulative decline of 24.3% in the first half of the year. High inventory levels at dealerships, diminishing returns from the "price-for-volume" strategy, weak consumer confidence, and strong wait-and-see sentiment are exacerbating market challenges.

Strategic Foundation: The Era of Extensive Growth Is Unsustainable

Automakers are broadly caught in a dilemma between volume and profitability—cutting prices to maintain sales volume squeezes margins, while raising prices to protect profits leads to falling sales. Industry-wide profitability remains low, and under the dual pressures of intense internal competition and cost volatility, strategies relying solely on scale and low pricing are no longer viable.