China Issues Anti-Price War Auto Regulations Amid 20% Jan Sales Drop (SAIC, BYD, CBA, S&P, Citi)

China introduced Thursday anti-competitive pricing rules to end a sector-wide price war that has driven passenger car sales down 19.5% in January from a year earlier, the steepest annual decline in nearly two years. The State Administration for Market Regulation prohibited setting prices below production cost to squeeze rivals or monopolize the market, and targeted deceptive pricing and collusion between auto manufacturers and parts suppliers. Analysts estimate the price war has cost the industry 471 billion yuan ($68 billion) in lost output value over the past three years. January sales of 1.4 million units, versus 2.2 million in December, reflect tighter buyer budgets, reduced tax exemptions for electric vehicles, and phased-out trade-in subsidies. Global demand is expected to soften this year, with S&P Global forecasting light-vehicle sales to fall up to 3% in 2026. However, exports surged 49% to 589,000 units in January, supported by reduced import tariffs in Canada and a pending EU deal. BYD, the world’s largest electric-vehicle maker, projects overseas sales of about 1.3 million units in 2026, up from 1.05 million last year.