Discounts and price wars reduce the profitability of entrepreneurs and strength of car dealerships.
Chinese car entrepreneurs turn to auto manufacturers with a request to stop mass supply cars in salons, saying that these actions are damaged by their liquidity, reduce profitability and force some players in the market to consume business. Reuters reported it.
This statement sounded after Chinese authorities to stop destructive price wars, which has become a chronic problem for the market.
According to the China’s Chamber of Commerce and the Auto-Distress Industry, the situation for shares in the second quarter has become more complicated due to a new wave of discounts. In the statement, Chamber representatives emphasized that car manufacturers should establish realistic annual labor and sale plans, as well as refrain from transferring excessive reserves to sellers, forcing them to accumulate goods.
The appeal also states the need to reduce the payment cycle between manufacturers and sellers, as well as the prohibition of “forced removal of sellers from the network and the closure of salons under the distribution of distribution.”
The situation affects the market: according to local media, one of the major electric vehicles in Shandun province has stopped working, and at least 20 of its car dealerships are abandoned or closed.
We remind you, earlier reported that China sells every third new car in the world.
Cars “with zero mileage” appeared in the second Chinese market
News from CORRESPONDENT.NET On the telegram and whatsapp. Subscribe to our channels https://t.me/KorresPondentNet and WhatsApp
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.