State Administration for Market Regulation Releases Automotive Pricing Compliance Guidelines

[Policy Regulation] On February 12, the State Administration for Market Regulation issued the 'Compliance Guidelines for Pricing Practices in the Automotive Industry,' systematically regulating pricing behaviors across the entire industry chain for the first time.

Key Developments: Five Major Pricing Red Lines Established to Curb 'Involutionary' Competition

The Guidelines consist of five chapters and 28 articles, covering automakers and parts suppliers, authorized dealers, and emerging trading platforms. They explicitly prohibit sales below cost aimed at eliminating competitors. Except for clearing excess inventory, practices such as offering discounts, subsidies, or bulk purchase incentives that effectively result in losses are deemed to carry "significant legal risks."

Key Data: 28 Detailed Provisions Covering the Entire Chain

Regarding the supply chain, Article 11 stipulates that if costs have not changed significantly, parts suppliers that sharply raise prices without legitimate justification during periods of supply-demand imbalance will be considered as disrupting the market. The Guidelines also strictly forbid price collusion between automakers and suppliers and require clear price labeling for new vehicle sales, eliminating false promotional tactics.

Strategic Foundation: Harmonizing Regulatory Standards to Promote Quality-Based Pricing

This move aims to implement directives targeting 'involutionary' competition, curb price fraud and irrational competitive practices, and steer the industry away from price wars toward high-quality, healthy competition.