Gasgoo Munich- At the 2026 China Auto Chongqing Summit on June 13, Wang Hui, chairman of Avatr Technology, took aim at the negative impact of the industry's prolonged price war. Continuous discounting, he argued, is steadily eroding consumer trust in the entire automotive sector.Image source: China Auto Chongqing SummitData from a third-party consultancy reveals a stark reality: price drives just 3% of purchasing decisions, while technology accounts for 20.7% — a nearly sevenfold gap. This contrast highlights a shift in market logic, where product technology and brand value now carry far more weight with consumers than price tags.Price cuts have become the norm in the domestic market, with many brands relying on frequent adjustments to secure short-term sales. But the limitations of this strategy are becoming clear. Wang Hui outlined a viable path for long-term growth, focusing on two key dimensions: product safety and global expansion.Price Wars Erode Long-Term Industry TrustYears of price competition were a central pain point for executives at the Chongqing Summit. While relying on discounts can drive short-term volume, the long-term damage is becoming visible. Using survey data as his core argument, Wang Hui argued that the fundamental logic of market competition has shifted.Consumers now prioritize hard strengths like underlying vehicle technology, intelligent driving, and safety — with technical influence outweighing price by a factor of seven. Relying solely on low prices to grab market share essentially reveals a lack of differentiated product value, forcing automakers to mask technical shortcomings with discounts.Frequent price adjustments, trimmed configurations, and volatile pricing systems directly erode trust. Potential buyers adopt a wait-and-see approach, holding out for the next round of cuts. Early purchasers feel shortchanged, diminishing brand loyalty and ultimately damaging the reputation of the entire auto industry.Amid these market conditions, Wang Hui outlined two non-negotiable baselines for operations. First, intelligent iteration must not sacrifice safety for convenience. Many brands currently relax safety standards to create buzz around smart features, simplifying body protection and active safety configurations. This may boost short-term marketing appeal, but it plants the seeds for long-term safety risks.As automakers upgrade smart features, they must also educate users on the boundaries of intelligent driving and safe driving practices, establishing a shared understanding of safety.Second, product value determines pricing power, and a robust technical foundation supports a reasonable brand premium. Avatr's first SUV commands an overseas price roughly 50% higher than its domestic price tag — a validation of this logic. A complete, integrated smart architecture and a full suite of high-end intelligent driving solutions create unique technical advantages. When a product offers irreplaceable value, there is no need to rely on low prices to capture market share.Third, the growth potential for a strategy based solely on price competition is shrinking. The core path to retaining customers and maintaining stable profitability lies in deepening original vehicle technology, building a comprehensive product system, and cultivating a stable brand reputation.Going Global Takes More Than a Single BeachheadGlobalization is widely seen by industry executives at the forum as the greatest opportunity for China's auto sector right now. Data from the China Association of Automobile Manufacturers (CAAM) shows exports totaled 4.059 million units from January to May, up 63% year-on-year. Overseas markets have become a core channel for offsetting domestic competition and driving growth.While export volumes climb, many automakers remain stuck in a single-point model of merely shipping vehicles abroad, relying on low-price models to secure short-term orders. In Wang Hui's view, simply exporting cars opens the market temporarily but cannot support long-term, stable development. Sustainable globalization requires a comprehensive, systematic approach.A systematic expansion involves multiple layers of execution, far beyond just selling cars in foreign countries. A complete overseas layout requires the simultaneous establishment of local production bases, sales channels, after-sales service networks, and local talent teams. By creating jobs and forging deep ties with local partners and consumers, companies build lasting market trust.Relying solely on vehicle exports, without supporting services or local operations, leaves sales vulnerable to regional price wars and policy shifts. There is no guarantee of profit stability.Image source: AvatrAvatr's ability to command a 50% premium overseas hinges on this systematic approach: localized production, unified global brand standards, technical adjustments for local road conditions, and a comprehensive after-sales network. This foundation supports stable pricing and allows the brand to escape the trap of low-price competition.Conversely, for export models that rely solely on low prices for volume, a single price cut by a local rival can cause orders to dry up quickly. Without sufficient profit to reinvest in R&D, companies fall into a vicious cycle of low prices, low margins, and weak innovation.Drawing on the state of domestic competition and export trends, Wang Hui issued a call to action for the entire industry. China's auto sector is at a critical turning point from "big" to "strong." Facing dual markets, automakers need a unified long-term strategy: commit to original technology R&D, uphold vehicle safety standards, and build a globally integrated operational system.If the industry remains trapped in endless price wars, profits across the supply chain will be squeezed. R&D investment will shrink, and the pace of technological innovation will slow. This would not only limit growth at home but also force reliance on low-volume exports abroad, making it nearly impossible to build autonomous brands with global influence.Only by moving beyond pure price competition and establishing differentiated advantages through technology, safety, and a complete operational system can Chinese automakers truly take root in global markets and become trusted local partners for international consumers.
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