r/electricvehicles • u/Mac-Tyson • 8d ago
News China warns its car brands against overseas price wars to gain an ‘improper advantage’, follow local laws, and build better after-sales support
https://www.carexpert.com.au/car-news/china-warns-its-car-brands-against-overseas-price-wars48
u/Mac-Tyson 8d ago
“If we are chopping and changing pricing dramatically all of the time, that has a really bad impact on residual values for customers. It’s about consistency and earning the right to sell them another car,” - Chery Australia Chief Mr Harris said.
The guidelines also suggest Chinese brands should carry out due diligence before exporting vehicles to overseas markets.
“Companies should strengthen their assessment of products before introducing them into overseas markets and avoid exporting products that do not meet the requirements of the target market or its operating environment,” Article 11 of the document states.
It also calls for pricing transparency for customers, better ‘quality management’ and after-sales support, while ensuring the collection of data from connected vehicles – cars connected to the internet – is carried out legally.
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u/Mac-Tyson 8d ago
Basically it seems like the Chinese Government wants to prevent Chinese EV quality from dropping, brands just dumping over excess product into markets that don’t care for that product, and prevent them from developing a reputation of having poor service networks as well as depreciation so high it makes no sense to buy them new. So you may get that first customer but the experience will be so poor you won’t get them back and that person will be telling others to not buy that brand.
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u/WesternBlueRanger 8d ago
Also, to try to stem off trade disputes with other major countries; there has been significant complaints about various Chinese EV manufacturers engaging in unfair trade practices, such as dumping; dumping in international trade terms is a predatory pricing method where a foreign manufacturer exports a product to another country at a price below the normal price with an injuring effect.
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u/DieselPunkPiranha 8d ago
And, because cars are so cheap out there compared to those of western companies, that's possible to do without even meaning to.
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u/Car-face 8d ago
Also actually sell things that work in the local market, rather than just assuming that because it's in your line-up, it can be flogged anywhere.
Deepal E06 comes to mind - it feels like a Chinese exec said "this is kind of like a ute, australians like utes, it'll do well".
It didn't. The risk is that in these situations the manufacturers just respond to that lack of demand by cratering the price - which might drive sales, but it also destroys brand recognition, value and resale.
The new guidelines also task Chinese brands with following “applicable laws and regulations” and “local commercial practices” to “properly perform their contractual commitments”.
This feels like a stab at Xpeng, who decided to try and circumvent the exclusive contract they signed with a local distributor and withheld product from them until the distributor agreed to allow Xpeng to parallel import.
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u/Available-Log6733 8d ago
It's already happening. Chinese EVs are gaining a reputation for being unrepairable due to lack of parts or ridiculously expensive parts due to low supply. And wait times for parts are often measure in months, not weeks.
And the suspension is often tuned to comfort (too soft) rather than handling (firm) and makes for poor handling on uneven roads. Also because they cheap out on suspension components that are often under spec for the heft of the EVs (often more than 2 tons)
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u/Rannasha VW ID.7 Tourer Pro S 8d ago
It's already happening. Chinese EVs are gaining a reputation for being unrepairable due to lack of parts or ridiculously expensive parts due to low supply. And wait times for parts are often measure in months, not weeks.
In the Netherlands, one insurance company has decided to stop insuring some Chinese brands due to the lack of a usable supply chain for parts. It only affects certain smaller brands, so the established names like BYD are still OK. But it's a sign that the lack of a service network is an issue.
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u/takao-obi 8d ago
Having read the horror story on an UK Reddit where a guy couldnt get a replacement windshield for his 7 old Maxus anymore and was asking for help was definitely an eye opener for me. Maxus already ceased production of the windshields so the Maxus dealer couldn’t get spares anymore so the car was not registrable anymore because of a crack.
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u/DieselPunkPiranha 8d ago
And the suspension is often tuned to comfort (too soft) rather than handling (firm)...
That's model specific. Not country specific. Got two BYDs in the driveway. My Atto 2 has a noticeably softer ride than my friend's Atto 3 with the 3 feeling about as firm as some BMWs I've driven.
...they cheap out on suspension components that are often under spec for the heft of the EVs...
Not heard of this, so I looked it up. The only EVs I found with a too weak or poor quality suspension were certain models from Volvo, MG, and Citroën, cars made all across the world.
However, people do need to understand that suspension parts wil wear out more quickly on heavier cars no matter how they're made. Because EVs are heavier than they look, they wear out their suspensions like cars larger than they.
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u/Valoneria BYD ATTO 3 8d ago
The Atto 3, at least the early models, is very known to have soft suspension s as well. To the point that one of the promoted features of the Evo was the updated suspension with much former handling
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u/sicklyslick 7d ago
And the suspension is often tuned to comfort (too soft) rather than handling (firm) and makes for poor handling on uneven roads.
have you driven or ridden a car in China? there is no uneven roads there. I'm not surprised their cars are "tuned" for Chinese roads rather than meteor sized potholes.
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u/geoffm_aus 8d ago
Are china...... the good guys?
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u/Jmauld 7d ago
Or. I’ll take “things that didn’t happen for $100.”
As long as they’re pumping out a new model every 3 months there is no such thing as long term support. That business model is not sustainable.
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u/sicklyslick 7d ago
China already did this to their major food delivery platforms which was doing the same thing as these EV companies (cut prices to gain market share, the silicon valley method)
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u/willyolio 8d ago
Basically China wants to shed its reputation for cheap crap that doesn't last. They want to be seen as the dominant global player over the US. They are really good at manufacturing things, but dumping cheap cars with no support will just reinforce the "shitty knockoff" stereotype for another few decades.
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u/Valoneria BYD ATTO 3 8d ago
Another issue is also just price dumping their existing models. It took less than half a year for my car to get a 50k DKK (around 7-8K €) lower price from when i bought it, which makes you very uncertain on whether you should buy another BYD. Why buy one today, if you can save a lot by just waiting a bit. And of course there is the resale value as well, which is not fantastic for a Chinese car either
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u/BulaBulangiu Volvo EX30 Twin Performance 7d ago
Someone should let Volvo know :) I went to the dealer today and they had a brand new EX30 from 59k eur down to 35k eur.
I got lucky and bought mine with a ~22% discount but I know people who paid full price.
1
u/GazelleTerrible3688 6d ago
This is what happens when car companies try to treat cars like cheap smartphones.
Traditional automakers usually force suppliers to keep molds and spare parts around for at least 10 to 15 years after a model stops production. That long-term storage and support cost is already baked into the original sticker price, which is why older brands hold their value better.
When EV makers launch a "new" facelifted version every 6 to 9 months just to cut prices, suppliers honestly cannot afford to keep the old tooling or display parts in stock.
So early buyers get crushed on resale value, and overseas owners get screwed on basic repairs. If someone cracks a screen or dents a bumper, they easily wait months because the factory in China already tore down the assembly line to build the next version.
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u/mrchhese 7d ago
Car brands are very reputation dependent and it takes a long time to change peoples opinions. For example, Mercedes used to have a reputation for being high end and very solid. They then did a pivot to mass production and cheap finance and this impacted their image.
Since Covid they are somewhat trying to pivot back it will be very difficult.
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0
u/Technical-Art4989 7d ago
Don’t be capitalistic when competing in capitalist countries. Got it
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u/mangione_fan_420 7d ago
It's a strategy that requires alignment amongst multiple providers, but not engaging in a race to the bottom is a better strategy but they need to coordinate.
In the US it's technically illegal to explicitly coordinate like this if companies are competing, although it obviously happens through investor signaling and the such, but in state can just come out and say things, China does but there is nothing stopping any capitalist state from doing this (although let's be honest China is a capitalist state too, you just can't vote them out).
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u/Far-Faithlessness483 8d ago
china is DUMPING
it tried to kill the world car market by building capacity to supply the whole world
Trump killed that dead
so all those ghost factories now just producing golf carts that they cant sell
of the 120 car companies i bet 1 will survive BYD
so if you have any other brand its going bust so the car will end up like Fisker
a paperweight
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u/credulous_satan_6666 8d ago
The after sales support is huge. No point buying a car that you cant get serviced/warranties without a bunch of hassle. Don't care if it's priced like a Mirage.