Beijing warns carmakers: stop killing your profitability hopes by selling below cost

South China Morning PostEN 2 min read 100% complete by Themis Qi,Daniel RenFebruary 13, 2026 at 06:38 AM

AI Summary

short article 2 min

Beijing has banned car manufacturers in China from selling vehicles below cost, effective immediately, in an attempt to end a price war that has hurt profitability. The State Administration for Market Regulation (SAMR) issued "pricing guidance" listing prohibited tactics, including selling upgraded models at the same price as lower-grade ones and offering discounts that bring net prices below production cost. Regulators previously called for an end to the price war in 2023. The move comes as EV buyers face increasing purchase taxes as government incentives are phased out. Analysts predict the new regulations may decrease consumer buying interest as expected discounts to offset declining government support may not materialize.

Key Entities & Roles

Key Player Opposition Context

Shanghai 40% Wan Zhuo Auto 50% Zhao Zhen ×260% Beijing ×270% China 80% State Administration for Market Regulation (SAMR) 90%

Keywords

price war 100% profitability 90% below-cost pricing 80% discounts and subsidies 70% car market 70% sales tax break 60% vehicle manufacturers 60% state administration for market regulation 50% deflationary conditions 40% ev buyers 40%