Gasgoo Munich-Chinese automakers are accelerating their global push, yet the price wars they’ve grown accustomed to fighting at home shouldn’t simply be transplanted overseas.
On August 24, the Ministry of Commerce, the Ministry of Industry and Information Technology, and the State Administration for Market Regulation jointly issued guidelines on overseas competition and compliance for the auto industry. The document was officially made public on September 1.
Spanning four chapters and 20 articles, pricing takes center stage. Companies are advised to establish clear price tiers in overseas markets to avoid frequent, drastic fluctuations that could harm consumer interests and brand image. The guidelines also call for standardizing dealer incentives, promotions, and financial incentives.
This doesn’t mean Chinese automakers can’t cut prices abroad. What matters is that as the industry shifts from simply exporting products to local production and long-term operations, regulators are issuing a warning:
The cars can go, but disorderly competition must stay behind.
This highlights the other side of the story that Gasgoo’s "China’s Global Solution" series aims to explore. As Chinese technology, products, and supply chains expand globally, automakers need to export more than just competitiveness—they need a business model capable of sustaining global competition over the long haul.
Tactics That Work at Home May Fail Abroad
Why now?
The immediate context is that China’s auto exports are not only growing in volume but also shifting in structure.
An official interpretation from the Ministry of Commerce on September 1 cites customs data showing China exported 8.32 million vehicles in 2025, reaching over 200 countries and regions. Chinese companies have also invested in auto manufacturing across more than 80 nations.
Looking ahead to 2026, an even more significant shift is underway: Europe is becoming a key battleground for China’s leading automakers.
Data from the Gasgoo Automotive Research Institute indicates that in June 2026, the largest export destination for passenger vehicles from China’s top three players—BYD, Geely Holding, and Chery Holding—was the "EU plus UK and EFTA" bloc.
Specifically, Chery Holding shipped 64,678 units to the region, followed by BYD with 54,085 and Geely Holding with 29,848. For each of these companies, this region topped their export charts.
Yet their overseas footprints differ significantly.
BYD is shifting its export focus from Latin America to Europe. In June, it shipped 24,649 units to Southeast Asia and 20,697 to Oceania, creating a structure led by Europe and supported by the Asia-Pacific. Geely, meanwhile, is building a balanced presence across Europe, the Commonwealth of Independent States (CIS), and Southeast Asia. Chery maintains a "dual-core" strategy in Europe and the CIS, while keeping substantial export volumes in Latin America, Africa, and Southeast Asia.
This signals that Chinese auto exports are entering a new phase.
Previously, the export debate focused on "where else can we sell more cars?" Now, as Chinese brands penetrate major global markets, the question is evolving:
How exactly should business be conducted in different markets?
Nowhere is this truer than in Europe.
It is not only the home turf of traditional giants like Volkswagen, BMW, Mercedes-Benz, Stellantis, and Renault, but also a market with mature dealership networks, robust consumer protections, and a complex trade and regulatory landscape.
For Chinese automakers entering these markets, product and cost competitiveness remain essential—but relying on price alone is no longer enough.
Li Yaxu, president of Magna China, has cautioned against blindly applying price wars and the strategy of "flooding the market with variants" abroad. In his view, extending domestic competitive tactics overseas risks massive waste.
BYD’s evolution in Spain offers a clear window into this shift.
By the end of 2025, BYD had established 100 dealerships in Spain. That number rose to 102 by late March this year, with plans to expand to 130 by 2026. In the first five months of this year, BYD registered 17,987 vehicles in Spain—a 131% year-on-year jump. By June, cumulative registrations surpassed 50,000 units over three years in the market.
As sales climb, the distribution network deepens.
At this stage, a single price adjustment affects more than just the automaker’s bottom line.
Vehicle residual values, dealer inventory and margins, brand positioning, and even the local competitive landscape can all be thrown off balance.
This explains why the guidelines don’t just debate whether cars are too expensive or too cheap, but instead break down requirements in granular detail.
Article 4 suggests companies "may" establish pricing strategies based on costs and guided by international supply and demand, while ensuring compliance. Crucially, it warns against disrupting market order to gain an unfair advantage.
Article 5 goes further, stating that companies "should" set clear price tiers for different configurations based on local laws, market principles, and business practices. It explicitly calls for avoiding frequent, drastic price swings that could damage consumer interests and brand image.
The goal, therefore, isn’t to eliminate price competition.
Rather, it’s to stop Chinese automakers from relying on frequent price cuts, channel games, and disorderly low-price competition as their primary tools as they dig deeper into foreign markets.
Dealers Are Harder to Manage Than Price Cuts
Focusing solely on price risks underestimating the document’s significance.
Because immediately following pricing, Article 7 turns to the issue of dealers.
Companies are urged to respect the pricing autonomy of local dealers and agents. When offering sales incentives, they must establish clear, reasonable agreements and honor their commitments.
This clause may lack the headline appeal of "avoiding drastic price cuts," but it could be more critical.
Selling cars isn’t a one-off transaction.
When a local dealer decides to represent a new Chinese brand, they must build showrooms, hire staff, provide training, stock parts, and carry vehicle inventory.
A BYD dealership in Brazil; Source: BYD
If an automaker slashes retail prices to chase short-term sales, the inventory sitting in dealers’ lots can rapidly lose value.
This conflict is all too familiar in the Chinese market.
The difference is that Chinese brands in many overseas markets are still in the process of building their networks.
BYD’s expansion in Spain to over 100 outlets in just over three years is a prime example. The more dealerships there are, the deeper Chinese automakers are tied into the local commercial ecosystem.
The question shifts from "Can I sell cheaper than the competition?" to "Will local partners stick with me for the next decade?"
A price cut might boost monthly sales, but if dealers constantly face inventory devaluation and an unstable pricing structure, expanding the network later will come at a much higher cost.
As more Chinese brands enter the same overseas markets, this issue will only intensify.
Zhang Yongwei, chairman of the Chebaihui Research Institute, argues that "coordinated expansion should be a hard constraint, not just a suggestion." He believes companies shouldn’t crowd into the same markets, which leads to internal friction and value erosion, let alone engage in cutthroat competition within the same region.
He warns: "One company’s missteps don’t just hurt itself—they tarnish the entire Chinese auto industry."
It should be noted that "hard constraint" is Zhang’s personal stance, not official policy language in the guidelines. Yet his point highlights a growing dilemma as Chinese exports scale up: while companies remain rivals, the image of Chinese brands abroad is often inseparable.
Jetour Auto’s 2026 Global Dealer Conference; Source: Jetour Auto
If one company grabs market share through disorderly low pricing, the eventual cost may be borne by more than just that company.
Therefore, Articles 7 through 9 create a cohesive logic: respect dealer pricing autonomy, standardize incentives, ensure pricing transparency, and impose compliance requirements on promotions like discounts, gifts, and financial incentives.
Chinese automakers can’t rely solely on sales logic abroad; they need to build a stable operational order.
Going Global Isn’t Just Shipping "Chinese Versions" Abroad
Beyond price and channels, Article 11 of the guidelines includes a noteworthy line: "Companies must strengthen product evaluation for overseas markets to avoid exporting products that don’t fit local needs or conditions."
This seemingly ordinary statement actually touches on another core issue of Chinese auto globalization.
A best-seller in China isn’t automatically a fit for the rest of the world.
The market environment itself is different.
BYD’s June export structure illustrates this. According to Gasgoo Automotive Research Institute, BYD exported 16,028 passenger vehicles to Central and South America that month, dropping the region to fourth place in its export rankings.
A key factor is shifting import policy in Brazil. As Brazil raised its import tariff on fully electric vehicles to 35% in July, the rush to stockpile ahead of the tariff hike has faded.
For automakers, this means market models built on exporting finished vehicles must adapt to policy shifts. Whether through knocked-down (KD) assembly or deeper localization, the industry is grappling with the same fundamental question:
When external conditions change, do Chinese automakers have the capacity to stay?
Beyond policy, differences in climate, road conditions, regulations, energy infrastructure, and even daily driving habits can be stark.
Especially in the era of smart electric vehicles, these disparities widen.
Range and charging logic developed for China’s mature charging network may not hold up in markets with fragile infrastructure. Similarly, autonomous driving systems trained on Chinese roads must adapt to entirely different signage, traffic rules, and driving habits in Europe, the Middle East, or Southeast Asia.
Consequently, the guidelines call for thorough market research and adaptive development, alongside robust quality management and after-sales systems overseas.
Further down the line, the guidelines address labor practices, data processing for connected and autonomous vehicles, intellectual property, antitrust, and green compliance.
These topics seem far removed from the traditional concept of "exporting cars."
But that precisely proves that the nature of Chinese auto exports has fundamentally changed.
Selling 10,000 cars abroad used to be about product, price, and logistics.
Now, building local factories, hiring thousands of workers, onboarding hundreds of dealers, and establishing R&D and supply chains brings a different set of challenges:
How to manage local staff? Where to store consumer data? Can autonomous driving data cross borders? What intellectual property rights are involved in components? How can the supply chain meet local environmental regulations?
These are not issues an export department can solve alone.
They belong to the daily operations of a multinational automaker.
From "Exporting Products" to "Exporting Operational Capability"
Therefore, interpreting the guidelines as merely "three ministries telling Chinese automakers not to fight price wars abroad" is too narrow.
First, it is not an administrative order banning price cuts.
Article 19 clarifies that the document offers "general guidance" on overseas competition and compliance, intended "for company reference."
An official from the Ministry of Commerce’s Department of Outward Investment and Economic Cooperation further emphasized on September 1 that the guidelines highlight "public service attributes." As part of the broader overseas service infrastructure, they are a "public service product designed to help the auto industry expand globally."
This offers another lens through which to view the document: it provides a behavioral reference for overseas operations while warning companies in advance about the pitfalls they will face abroad.
Looking back at the domestic market, efforts to regulate competitive order in the auto industry are also advancing.
In February, the State Administration for Market Regulation issued compliance guidelines for pricing in auto production and sales. Six months later, as Chinese automakers deepen their global footprint, discussions on price and competitive order have extended to overseas operations.
The two documents target different markets and specifics, but the signals are consistent: the auto industry certainly needs competition, but it shouldn’t devolve into disorderly pricing, fractured dealer relationships, or harmed consumer interests.
For overseas markets, the implications run even deeper.
In recent years, discussions of Chinese auto exports have focused on volume.
Then, attention shifted to overseas factories.
Thus, "from exporting products to exporting capacity" became the common refrain summarizing Chinese auto globalization.
Yet, this is not the final destination.
Wang Lang, vice president of Chery Auto, recently argued at an industry forum that Chinese globalization has entered a "new stage of long-term operation." The focus used to be on shipping products, building channels, and opening markets. The next stage will measure globalization capability not by "how many markets you enter," but by "can you sustain operations in those markets?"
He summarizes this process in nine words: "Walk in, climb up, put down roots."
"Walking in" means integrating into local user bases, channels, and industrial ecosystems. "Climbing up" means elevating products, brands, and pricing power. "Putting down roots" means building stable organizations, service networks, supply chains, and governance structures.
This aligns perfectly with the issues covered in the guidelines: pricing, channels, product adaptability, labor, data, and intellectual property.
Once a Chinese automaker has factories, dealers, suppliers, and employees abroad, it must export more than just cars and manufacturing know-how—it must export a full set of operational capabilities.
How to price, maintain dealer relationships, handle after-sales, manage local staff, process data and IP, and comply with local laws—these lack the glamour of sales figures, but they ultimately determine whether a company survives abroad for three years or thirty.
Wang Lang put it more bluntly: "Compliance isn’t the final door; it’s the first blueprint of the product."
In some ways, the Chinese auto industry has honed product strength, cost control, and rapid iteration in the domestic market over the past few years.
These capabilities have helped Chinese technology, products, and supply chains go global.
But moving from "Made in China" to "China’s Solution," and then transforming that solution into a "Global Solution" that takes root locally, requires far more than just selling products.
Technology must adapt to local markets, products must integrate into local lives, and companies must learn to coexist long-term with local dealers, suppliers, employees, and regulators.
This may be the new challenge for "China’s Solution" at this stage of globalization: what truly goes global isn’t just better products and technology, but a business model capable of sustaining operations across diverse markets over the long term.
The next lesson in globalization isn’t about how to sell cars faster—it’s about how to build a lasting business in unfamiliar markets.
