In a market that’s rapidly evolving, the value of quality is becoming increasingly apparent. Recent commentary from Huawei’s consumer business CEO, Yu Chengdong, highlights a growing consensus within the Chinese automotive industry: the perils of an unchecked price war and its detrimental effects on product integrity and consumer experience.
Yu’s stance is a straightforward one: the relentless pursuit of lower prices, at the expense of quality and innovation, is not a sustainable business model. He advocates for “value competition,” emphasizing the importance of enhancing product features and delivering a superior customer experience, rather than simply offering the lowest price point.
According to Yu, long-term survival in the automotive sector demands more than just deep discounts. He believes companies resorting to price wars often lack the underlying competitive strength needed for enduring success. Genuine market leadership, he argues, is built on superior technology, design, and a commitment to excellence.
Mirroring this sentiment, Wang Xia, President of the Automotive Industry Committee of the China Council for the Promotion of International Trade, echoed Yu’s concerns. Wang underscored the negative consequences of “unprincipled price wars,” emphasizing their impact on profit margins, product quality, and, ultimately, on the consumer.
Wang called on automakers to uphold fundamental ethical standards, including prioritizing safety and quality, maintaining integrity in business practices, and embracing a long-term perspective. The industry should avoid cutting corners and resist the temptation to export the practice of offering goods below cost to international markets.
Echoing this sentiment is Li Shufu, chairman of Geely Holding Group.李书福 also expressed the belief that excessive price cuts will ultimately lead to a decline in vehicle quality.
“As price wars intensify, quality will suffer, and service experiences will deteriorate, ultimately sealing the fate of these companies. Some companies have abandoned ethical practice, and are engaged in disorderly competition. Companies that lack ethical practice and act recklessly will not go far. That’s why Geely will not follow this development model,” said Li Shufu.
Original article, Author: Tobias. If you wish to reprint this article, please indicate the source:https://aicnbc.com/1871.html
