(JW Insights) Jul 10 -- The China Association of Automobile Manufacturers(CAAM), China’s major auto group, on July 8 retracted a pledge to avoid "abnormal pricing" made two days earlier among 16 automakers, including Tesla and China’s leading automakers, Pandaily reported on the same day.

At the 2023 China Automotive Forum held in Shanghai on July 6, representatives from multiple automotive companies signed a document called “Commitment Letter for Maintaining Fair Market Order in the Automotive Industry.” It is reported that the car manufacturers who signed the commitment letter include FAW, Dongfeng, SAIC, Changan, BAIC, GAC Motor, Foton Motor, Chery Automobiles, JAC Motors, Geely Auto, Great Wall Motors (GWM), BYD, NIO, Li Auto, Xpeng, and Tesla.

Two days later, the association issued a statement on its official website stating that the previous commitment letter’s mention of “disrupting market fair competition order with abnormal prices” involving “prices” was expressed improperly. Therefore, this clause has been removed from the commitment letter.

The association also urged these 16 companies and other member enterprises in automobile industry to strictly abide by the Anti-Monopoly Law, relevant administrative regulations, guidelines, and rules; independently set prices; engage in fair competition; and jointly contribute to standardized, healthy, and innovative development of the industry.

This “Commitment Letter” aims to fulfill the obligation of industry associations to maintain fair market competition, as stipulated in Article 14 of the Anti-Monopoly Law, which states that industry associations should strengthen self-discipline within the industry, guide operators in the industry to compete lawfully and operate in compliance with regulations.

The expression of prices in the “Commitment Letter” has sparked controversy. Just 2 days later, the CAAM issued a public correction of information.

Some industry insiders have expressed that price wars are market behaviors in business competition, and the automotive industry is no exception, according to the Pandaily report.

(Gao J/Yuan XY)