Ongoing Price War Causes Chinese Car Quality to Decline

KatadataOTO – The phenomenon of the price war in the automotive world is not a new thing, but it is becoming more rampant along with the increasing variety of Chinese cars, including in Indonesia.

A price war is clearly defined as a condition where manufacturers compete to introduce new models, with a cheaper price tag compared to similar segments in the same class.

In its home country, the Chinese car price war is said to have started showing negative impacts. One of them is the decline in the quality of gasoline-powered cars.

This happens because the price competition is getting hotter, forcing many manufacturers to reduce extra expenses such as production costs.

Photo : Paultan

Meanwhile, in 2025, the China Initial Quality Study shows there were 229 problems per 100 vehicles reported as problematic by their owners. This figure is up 17 from the 2024 results.

“The IQS performance of gasoline-powered cars has experienced a noticeable year-on-year decline,” said Elvis Yang, General Manager of Auto Product Practice at JD Power, quoted from China Daily, Wednesday (03/09).

IQS itself is the Initial Quality Study, a survey that clearly shows how good the quality of a vehicle is.

Elvis said that in the transition process towards vehicle electrification, it is important for manufacturers to maintain market share while improving vehicle quality.

But that certainly has its own challenges. Competition is getting tighter, especially when the Electric Vehicle (EV) alternative appears, namely the electric car.

In the premium segment, Land Rover ranks first as the brand with the most problematic vehicles. The ratio is claimed to be 208 problems per 100 cars.

For your information, the President of China had previously urged all related parties to be cautious about the potential for overcapacity, especially for electric cars.

If the price war continues for a long period, the local automotive industry there could experience huge losses and market instability.

Photo : KatadataOTO

Chinese electric car manufacturers are expected to adopt sustainable pricing strategies to avoid these negative impacts.

In Indonesia, the real impact of the price war has not been significant. However, used car sellers reveal that this phenomenon has caused the price of used Chinese-made vehicles to depreciate sharply.

The price drop is even claimed to reach 30 percent-40 percent. Thus, it has become a concern for many prospective Chinese car customers.