China issues new rules to curb auto price war after January passenger car sales drop 20%

Associated Press (AP)EN 3 min read 100% complete by By CHAN HO-HIMFebruary 12, 2026 at 11:23 AM

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China's State Administration for Market Regulation issued new guidelines to curb a price war among automakers after passenger car sales dropped nearly 20% in January, the largest decline in almost two years. The regulations aim to prevent companies from pricing below production costs to eliminate competition, and address deceptive pricing and price-fixing. The decline in sales is attributed to weakening demand, reduced tax exemptions for EV purchases, and uncertainty about trade-in subsidies. The price war has reportedly caused significant losses for the industry, estimated at 471 billion yuan over the past three years. Despite anticipated domestic demand dips, Chinese automakers are expanding globally, with passenger car exports increasing by 49% in January.

Key Entities & Roles

Key Player Opposition Context

Changan Auto 30% Latin America 40% Europe 40% Claire Yuan 50% Li Yanwei 50% China Automobile Dealers Association 50% Tesla 60% S&P Global Ratings ×260% China Association of Automobile Manufacturers 60% BYD 70% State Administration for Market Regulation 70% China ×690%

Keywords

auto price war 80% china auto industry 70% price fixing 60% electric vehicle market 50% tax exemptions 50% global auto market 40% deceptive pricing 40%

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Neutral

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Associated Press (AP)

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90%

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China

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