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Price War Shows Signs of Abating in World’s Biggest Auto Market

The intense price war in the world’s largest car market is starting to calm down.

Charging cables sit connected a row of BYD Co. E6 electric taxis at the company's charging station in Shenzhen, China, on Wednesday, Sept. 20, 2017. China, the worlds biggest auto market, may have all buses powered by batteries by 2020 and all other vehicles will follow suit by 2030, BYD Chairman Wang Chuanfu predicts.
Charging cables sit connected a row of BYD Co. E6 electric taxis at the company's charging station in Shenzhen, China, on Wednesday, Sept. 20, 2017. China, the worlds biggest auto market, may have all buses powered by batteries by 2020 and all other vehicles will follow suit by 2030, BYD Chairman Wang Chuanfu predicts.

The intense price war in the world’s largest car market is starting to calm down.

In the past two months, the proportion of cars subject to significant price cuts has fallen. In July, 428 variants of passenger cars — about 16% the market — had undergone price drops of more than 5% within a three-month period, according to Bloomberg analysis of data compiled by research provider China Auto Market. 

The figure had peaked at 30% of car models as recently as May — the highest since at least 2015, when CAM’s data became available.

Price War Shows Signs of Abating in World’s Biggest Auto Market

The price war was initially triggered by Tesla Inc., and quickly spread throughout the market, ensnaring both electric and gasoline vehicles.

Read More: Tesla Started a China Price War That May Destroy Some Carmakers

Figures released Tuesday showed car sales fell 2.3% in July from a year earlier to 1.78 million units, though new-energy vehicle sales jumped 32%.  

Read More: China July Retail Passenger Vehicle Sales -2.3% Y/y, NEV +31.9%

While prices are broadly stabilizing, steep discounts are still on offer for some models, including local manufacturer Chongqing Changan Automobile Co. and Jaguar and Land Rover — both controlled by India’s Tata Motors Ltd. 

Price War Shows Signs of Abating in World’s Biggest Auto Market

More stories like this are available on bloomberg.com

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