Particle.news

China Bans Below-Cost Car Sales to Curb Auto Price War

SAMR’s immediately effective rules aim to steady a weakening market after a sharp January sales slump.

Overview

  • New guidelines bar automakers from selling vehicles below a broadly defined total production cost that includes administrative, financial and sales overheads.
  • The rules outlaw price-fixing with suppliers and prohibit punitive rebate schemes that push dealers into money-losing sales.
  • Digital car-buying platforms are designated real-time market monitors and are urged to issue dual-risk alerts on abnormally low listings to consumers and regulators.
  • Software-defined vehicle provisions require clear notice before free trials expire and forbid turning undisclosed features into later paid subscriptions.
  • Passenger car sales fell 19.5% year-on-year in January to 1.4 million, the steepest drop since February 2024, and the regulator warns violators face significant legal risks.