GWM Claims It Refuses to Join Chinese Car Price War

KatadataOTO – Many methods are used by Chinese manufacturers to attract consumers. One of them is by slashing prices.

This phenomenon is often found in various countries. One of them is in Indonesia.

Manufacturers from China often market their products with very cheap price tags.

This method has drawn many responses from various parties. Such as from GWM Indonesia.

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Although also from China, they claim to be reluctant to join the price war to market products in the country.

"A price war is very unfavorable," said Martina Danuningrat, Strategy & Marketing Director of GWM Indonesia in Jakarta some time ago.

Furthermore, they said that GWM executives do not want to follow the existing trend.

Therefore, this Chinese brand will not be slashing the prices of their electric or hybrid cars.

"We believe in the quality we have without having to resort to a price war," Martina continued.

For your information, GWM has already marketed a number of cars for consumers in Indonesia.

For example, the GWM Ora 03, GWM Haval Jolion Ora, to the GWM Tank 500 can already be purchased by automotive enthusiasts in the country.

"Because we are confident that GWM has premium quality. So we are indeed stabilizing the price," Martina asserted.

As a reminder, Wei Jianjun, Chairman of GWM, stated that the condition of the electric car market in Indonesia is quite worrying.

This is because many manufacturers are competing in an unhealthy manner. Such as by slashing the prices of their products.

Negative Impacts of a Price War

On the other hand, the price war implemented by Chinese manufacturers is feared to have a number of impacts.

"A price war will directly erode the profit margins of producers," said Yannes Pasaribu, an automotive observer and academic from ITB (Bandung Institute of Technology) to KatadataOTO on a separate occasion.

According to Yannes, the profits earned by producers are very crucial. Especially for long-term investment.

It then impacts the expansion of the dealer network, the improvement of after-sales service quality, and future innovation.

Photo : KatadataOTO

Furthermore, it also has the potential to make the price of used cars cheaper or even plummet in the future.

Whereas resale value is one of the things that automotive consumers in the country pay close attention to.

Lastly, a price war where manufacturers compete to offer products with the lowest price tags can impact vehicle quality.