WNAM REPORT: The State Administration for Market Regulation of the People’s Republic of China has released an updated version of the “Rules on Price Behavior,” which apply to automobile manufacturers, dealerships, and spare parts suppliers.
The information was published on the regulator’s official website. According to the updated document, when setting product prices, companies must base their calculations on actual production costs and take into account the current balance of supply and demand in the market.
The new rules introduce stricter requirements regarding the relationship between selling prices and production costs. Automotive industry participants are strictly prohibited from entering into price-fixing agreements or coordinating pricing strategies. The directive emphasizes that failure to comply with these standards may entail “serious legal consequences” for violators.
According to a report by the China Association of Automobile Manufacturers (CAAM), vehicle sales in December 2025 fell by 18% year-on-year, while in January the decline reached nearly 20% — the sharpest drop since February 2024.
The weakening of consumer demand in the domestic market is largely attributed to households’ reluctance to make major purchases amid a prolonged cost-of-living squeeze and broader economic uncertainty. As a result, manufacturers are being forced to cut prices to stimulate sales, which in turn compresses profit margins and intensifies competition.
Analysts note that the updated pricing regulations may be aimed not only at preventing unfair competition, but also at stabilizing the market during a period of volatility. In the long term, the authorities appear to be seeking a balance between supporting consumer affordability and preventing destructive price wars that could undermine the financial sustainability of automakers.
