China targets value-driven auto market with new pricing rules, safety standards

• Reuters

• Published On Feb 13, 2026 at 01:10 PM IST

China’s auto industry, the world’s largest, ⁠faces rising pressure as demand is expected to stagnate this year while a years-long price war hurts profitability.

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China released new guidelines to regulate pricing behaviour for the automotive sector and outlined draft safety standards on Thursday, marking the latest effort to curb price wars and safeguard the industry’s value and quality.

The State Administration for ‌Market Regulation (SAMR) introduced ⁠guidelines ⁠targeting practices such as failure to display prices transparently and deceptive promotions by automakers, parts suppliers, and dealers involved in car production and sales.

Separately, China’s Ministry of Industry and Information Technology issued draft standards on automated driving systems, brake assistance systems and vehicle control components as part of efforts to strengthen vehicle safety regulation.

Ensuring public ⁠safety and ‌improving societal welfare “far outweigh the short-term cost increases for enterprises,” the ministry stated.

China’s auto industry, the world’s largest, ⁠faces rising pressure as demand is expected to stagnate this year while a years-long price war hurts profitability.

Since early 2025, Chinese authorities have ramped up efforts on a so-called “anti-involution” campaign to put an end to aggressive price cuts. Regulators intensified crackdowns on alleged unfair pricing practices and misleading advertising, while raising safety standards for vehicle tests and batteries, intending to ‌restore consumer confidence.

Analysts at Chinese industry groups have praised the measures, noting they have shifted the market’s focus from pricing tactics to value-based ⁠competition.

“The new guideline promotes orderly competition and rational development within the industry while advancing high-quality growth,” said Cui Dongshu, secretary-general at the China Passenger Car Association.

Losses in China’s auto industry fell significantly in the second half of 2025 as a result of the regulatory moves, according to Li Yanwei, an analyst with the China Automobile Dealers Association.