(Bloomberg) – Byd Co., Ltd. on Monday
Most of them come from Bloomberg
Stocks of China’s No. 1 car brand fell as much as 8.3%, while Peers Li Auto Inc., Great Wall Motor Co. and Geely Automobile Holdings Ltd. fell more than 5% as investors fear competition in the industry.
Byd offered discounts on its 22 electric and plug-in hybrid models sold in China until the end of June, but squirted a new range of price wars. Although EV sales generally reached new annual revenue, growth has been slowing down.
To kick-start slow consumer demand – worsened by China’s wider economic discomfort – automakers in the world’s largest auto market have cut their price tags. Even so, dealers’ stock levels reached 3.5 million cars or 57 inventory days last month, the highest inventory day since December 2023, despite data shared by the China Bus Association last week.
BYD’s revisions include cutting its Seagull hatchback to $55,800 ($7,780), reducing it by 20% on the model, which is already the cheapest for automakers and has gained global attention for under $10,000. The price of a seal dual-sport hybrid sedan is up to 34%, or $53,000 to $102,800.
In recent months, BYD has tried to clear the list of old models, including those without new driver assistance – models announced by the automaker in February will be added to its models for free. The pivot is not without its problems, further harming the struggling dealers with whom they are doing business.
“While some of these discounts have been in place since April, the official announcement sent a strong signal of how tough the market will be in the end,” Morgan Stanley analysts wrote in a note.
BYD’s latest cuts are expected to have a ripple effect as competitor automakers further trim prices to cut them into deeper profit margins. Huge pricing pressures have tightened the bottom line for many automakers, leading to financial losses and industry consolidation.
“We anticipate peers to follow BYD’s price cut,” analyzes at Citi Research wrote, noting that Chongqing Changan Automobile Co. announced a cash discount of 25,000 yuan for its Deepal S07 model over the weekend while Zhejiang Leapmotor Technologies Ltd. adjusted prices for its C16 full-size crossover sport utility vehicle and mid-sized SUV C11.
