By Kate Yuan

(JW Insights) Aug 9 -- The auto price war is starting to cool down in China, the world’s largest car market. In the past two months, the proportion of cars subject to significant price cuts has fallen, Bloomberg reported on August 9.

In July, 428 variants of passenger cars — about 16% the market — had undergone price drops of more than 5% within a three-month period. The figure had peaked at 30% of car models as recently as May, the highest since at least 2015, showed the data from research provider China Auto Market.

The price war was initially triggered by Tesla, and quickly spread throughout the market, ensnaring both electric and gasoline vehicles. Last October, Tesla lowered the prices of some models produced in Shanghai. In January of this year, Tesla's locally made cars became 14% cheaper compared to last year, and in certain cases, they were almost 50% cheaper than cars produced in the US and Europe. Chinese EV makers like Xpeng and NIO followed suit.

China’s car sales fell 2.3% in July from a year earlier to 1.78 million units, though new-energy vehicle sales jumped 32%, according to China Association of Automobile Manufacturers (CAAM), said the Bloomberg report.