Summary
- Great Wall Motor chairman openly fretted about industry’s health
- BYD exec criticizes his comments as alarmist, defends BYD’s debt
- Chinese auto shares tumbled this week over price war worries
BEIJING, (Reuters) – Tensions between two of China’s largest automakers erupted into the open on Friday when a BYD executive slammed as alarmist comments by the chief of Great Wall Motor that called the industry “unhealthy”.
Shares in Chinese automakers such as BYD, Nio and XPeng tumbled this week after the chairman of Great Wall Motor, Wei Jianjun, worried openly about China’s deepening price war, with pricing pressure hammering the bottom lines of car companies and suppliers.
In his remarks last Friday Wei even drew a parallel to Evergrande saying that the industry had its own version of the Chinese property developer that was liquidated last year after a major debt crisis, but did not name any names.
Li Yunfei, BYD’s general manager of branding and public relations, said on Friday that there was no crisis such as Evergrande’s among leading automakers, and said he was baffled by online speculation that Wei was referring to BYD.
In a lengthy post on Weibo, Li defended BYD’s 70% debt-to-asset ratio and over 580 billion yuan debt by making comparisons against the likes of Ford, Boeing and Toyota. He said this was the result of BYD growing rapidly even as some rivals had stagnated. He did not specify names.
Li added that BYD plans to hold online users who had spread such speculation legally responsible and had handed “evidence” to Chinese authorities.
Great Wall Motor did not immediately respond to a request for comment.
China’s auto price war is showing little signs of abating despite expressions of concern from both Chinese automakers and industry players. Several automakers followed BYD in offering fresh incentives on cars this week.
At least one other Chinese automaker has spoken out in support of Great Wall Motor’s Wei.
Zhu Huarong, the chairman of state-owned automaker Changan, told an annual shareholder meeting on Tuesday that his comments were a reminder to the industry that they needed to pay more attention to risks, local media reported.
Great Wall Motor and BYD have clashed publicly before. In 2023, Great Wall Motor announced it had filed a report with China’s regulators against BYD, saying BYD’s two top-selling hybrid models did not meet emissions standards.
Later that year, BYD made a call for China’s auto industry to band together and “demolish the old legends” of the global market, drawing a rebuke from Great Wall Motor.
Reporting by Beijing newsroom Editing by Christopher Cushing, Kate Mayberry and Frances Kerry
Source: worldautoforum.com
