China’s auto industry is confronting the full fallout from its price war. With net profit per vehicle sharply compressed, Beijing has begun scaling back purchase incentives while strengthening rules targeting below-cost sales and delayed payments to suppliers. Excess output that cannot be absorbed domestically is being diverted overseas, while Chinese automakers are expanding into batteries, charging, robotics and urban air mobility. Yet mounting restructuring pressure on global carmakers and a growing survival crisis among smaller Chinese manufacturers are together accelerating an industry-wide shakeout.
