China has recently issued new nationwide rules to regulate pricing in the auto industry and curb irregular practices, aiming to restore fair competition and support sustainable market development. The State Administration for Market Regulation’s (SAMR) guidelines set clearer boundaries for lawful pricing by automakers and dealers, require transparent price marking and promotions, and call for stronger internal compliance and industry self-discipline, As pricing normalizes, automakers and dealers may compete more on quality, innovation, service, and brand trust rather than purely on price, says GlobalData, a leading intelligence and productivity platform.
The policy comes as China Association of Automobile Manufacturers (CAAM) data shows January domestic deliveries fell 16% to 1.7 million units, while exports rose 45% to 681,000, amid reduced vehicle sales incentives in early 2026.
The regulation responds to rising financial strain and worsening market conduct in China’s auto sector. Years of aggressive discounting and below-cost competition have crushed profitability—especially for dealers, with margins down sharply since 2017 and over half reportedly loss-making in the first half of 2025 amid oversupply and weaker demand. Regulators also flagged harmful practices such as misleading price labels, hidden fees, unfair promotions, and “zero-kilometer” cars sold as new, undermining transparency and consumer trust.
Madhuchhanda Palit, Senior Automotive Analyst at GlobalData, comments: “SAMR’s guidelines mark a sweeping policy response to growing concerns over price wars that have undermined profitability, market order, and innovation. However, the new guidelines also increase compliance demands, requiring stronger internal pricing controls, traceability, clearer labeling, and improved reporting. Smaller firms and dealerships may face higher administrative costs, while local promotional flexibility could tighten and practices such as hidden-fee bundles or feature-unlock schemes face closer scrutiny.”
Major automakers, including BYD, Xpeng, Great Wall Motor, Chery, BAIC, and others, have publicly pledged their full support and commitment to comply with the new guidelines. BYD, for example, has committed to enhancing its internal pricing controls, eliminating unfair practices, and proactively building systems to track pricing behaviors across vehicle sales, financial services, and component supply. Xiaomi EV also issued statements affirming support and respect for the guidelines, promising to strengthen pricing transparency and compliance under the new rules.
