China’s Auto JVs Extend Price War With Launch of Discounted Models

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Preorders for SAIC-GM’s Cadillac XT5 began Saturday at a reduced price of 279,900 yuan. Photo: Cadillac

China’s auto joint ventures (JVs) are intensifying efforts to stimulate demand and catch up with homegrown players by releasing new, lower-priced models, escalating an already bruising price war in the world’s largest auto market.

At least three new car models were launched over the past week by companies established by Chinese and foreign automakers. On Saturday, SAIC General Motors Corp. Ltd. began taking preorders for its new Cadillac XT5 luxury SUV at a discounted starting price of 279,900 yuan ($39,300). That’s 120,000 yuan off the price of the previous model.

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China’s auto market faces a price war with joint ventures reducing prices on new models to compete with local automakers.
Companies like SAIC-GM, Nissan-DongFeng, and SAIC Volkswagen launched new models with significant discounts as their market shares drop.
Despite aggressive price cuts and increased government subsidies, overall sales in China’s automotive market declined by 5% last month.

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Who’s Who

SAIC General Motors Corp. Ltd.: SAIC General Motors Corp. Ltd. is a joint venture between SAIC and General Motors. Recently, it launched the Cadillac XT5 luxury SUV at a discounted starting price of 279,900 yuan ($39,300), reducing the price by 120,000 yuan. Over the first eight months of the year, SAIC-GM's sales plunged 58.9% to 256,434 vehicles, indicating significant challenges in the competitive Chinese auto market.

Nissan Motor Co. Ltd.: Nissan Motor Co. Ltd., through its joint venture with DongFeng Motor Corp., introduced a new version of the Altima midsize sedan at a discounted starting price of 127,800 yuan. This move is part of an effort to reposition mid-to-high-end sedans at more affordable price points in China's competitive auto market.

DongFeng Motor Corp.: DongFeng Motor Corp., in partnership with Nissan Motor Co. Ltd., introduced a new version of the Altima midsize sedan at a discounted starting price of 127,800 yuan. This move is part of efforts by joint ventures in China's auto market to boost demand by lowering prices, as they face increasing competition from homegrown automakers.

SAIC Volkswagen Automotive Co. Ltd.: SAIC Volkswagen Automotive Co. Ltd. launched a new Passat Pro sedan at a discounted starting price of 159,900 yuan. In July, it slashed prices of major models, including the Lavida compact and Tiguan SUV, with discounts up to 59,000 yuan. Despite these efforts, its sales fell 4.8% year-on-year in the first eight months of 2024 to 678,091 vehicles. The company faces increasing competition from local brands like BYD.

BYD Co. Ltd.: BYD Co. Ltd., a Shenzhen-based automaker, has been gaining market share in China's auto market. It triggered a fresh round of price cuts on most of its models in February. From January to August, BYD's sales grew nearly 30% to over 2.3 million vehicles, positioning it to potentially overtake SAIC in total sales for the year.

General Motors Co.: General Motors Co.'s joint venture with SAIC, SAIC-GM, experienced a significant decline in sales, plummeting 58.9% to 256,434 vehicles in the first eight months of the year. In an effort to regain market share, SAIC-GM launched a new Cadillac XT5 luxury SUV at a heavily discounted price. However, the overall market remains challenging due to intense competition from local brands like BYD and sluggish consumer spending in China.

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