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Price wars are expected for Chinese carmakers

THE price competition between domestic brands is expected to intensify this year, especially in the sport utility vehicle (SUV) segment, according to a report published by the credit rating agency Fitch Ratings.

Fitch Ratings estimated that the competition will lead to further brand polarization and dampen the profitability of weaker brands.

Some small, weak domestic brands are likely to suffer market share losses and margin compression. On the other hand, brands with competitive product offerings including Geely, Guangzhou Automobile Group’s Trumpchi and SAIC Motor’s Roewe are likely to outperform in sales growth and retain healthy profitability, Fitch Ratings said.

Chang’an Automobile lowered its retail prices of its models in late May this year, followed by JAC Motors’ price promotions for its best-selling models in early June. Great Wall, China’s largest SUV manufacturer, cut the retail prices of its models named Haval H2 and Haval H6 in early June.


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