By Alimat Aliyeva
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, AzerNEWS
reports.
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.
